his majesty king abdullah ii king of the hashemite kingdom ... · pdf filejordan islamic bank...

His Majesty King Abdullah IIKing of the Hashemite Kingdom of Jordan

HRH Prince Hussein AbdullahCrown Prince

7

In the Name of Allah, the Merciful, the Compassionate

Jordan Islamic Bank

Public Shareholding Limited Liability Company

Established in Amman - the Hashemite Kingdom of Jordan and registered as a public shareholding limited liability company in the Companies Registry on 28.11.1978 under reference No. 124 pursuant to the requirements of the by-then effective Companies Law and in accordance with the provisions of Jordan Islamic Bank Law No. 13 of 1978, which was superseded by the Banks Law No. 62 of 1985 that was abolished pursuant to the Banks Law No. 28 of 2000 effective as of 02.08.2000, which included a special chapter on Islamic Banks.

The Thirty First Annual Reportfor the year 2009

Presented to the General Assembly at their ordinary meeting convened in Amman on Tuesday 12 Jumada Alawwal 1431 H

Corresponding to 27/4/2010

11

H.E. Mr. Musa Abdelaziz ShihadehVice Chairman - General Manager

Mr. Saleh Musa AlShantir Deputy General Manager

Mr. Wael Mohammed Musa Barakat Assistant General Manager

Mr. Nabil Mostafa Hussein Asaad Assistant General Manager

Mr. "Mohammed Majed" Allan Assistant General Manager

Mr. Omar Rebhi Jabari Assistant General Manager

Dr. Hussein Said "Saifan" Assistant General Manager

12


Assalmu Alikum Wa Rahmtu Allah Wa Baraktu,

All Praise be to Allah, Lord of the Worlds,And Prayers and Peace be upon Mohammedhis Servant and Messenger.

Dear Shareholders,

The year 2009 witnessed the celebration of Jordan Islamic Bank of its 30th anniversary, which commenced its businesses by opening the first branch on 22/9/1979, having the privilege to pioneer the Islamic banking business in Jordan. Throughout its course of business, the Bank has been keen to be faithful to its perspective, a pioneer in its field of business, distinct in its dealings, advanced in its methods of work, well-prepared to deal with all developments and responsive to the needs of its clients who believe in the Bank’s perspective in all circumstances. The Bank has also achieved a steady and balanced growth in its various activities, exemplified Sharia-compliant Islamic institutions and overcame all obstacles in its progress, taking into account the compliance with all laws, legislations, rules, regulations, instructions, traditions, and methods of control and inspection applicable to the conventional banks in the Kingdom, despite the apparent variance among their respective applications.

Throughout 2009, Jordan Islamic Bank continued its progress overcoming the global financial crisis and its negative consequences on the national and regional economies. The Bank’s total assets amounted to nearly JD (2.5) billion at a growth of about (13.9%). The total balances of saving schemes were about JD (2.2) billion at a growth of approximately (16.2%). The total assets of financial investments amounted to about JD (1.6) billion at a growth of nearly (10.2%), and the profits of joint investment prior distribution were around JD (100) million. The Bank’s profits before tax amounted to about JD (39) million, with a return on equity of approximately (23%), while profit after tax amounted to about JD (28) million, with a return on equity of approximately (16.5%). The Board of Directors recommended the General Assembly to distribute dividends to shareholders at (12%) of the Bank’s paid capital.

This accomplishment is a success and grace from Allah glorified and exalted, and is the fruit of the continuous support from those believing in the perspective and approach of this institution. It is also attributed to the distinguished persistent efforts exerted by the Bank’s Executive Management and employees, May Allah reward you all on our behalf the best reward.

The Bank will pursue its straightforward path, In Sha’ Allah, serving its mission, responding to the needs of the national economy and local community and taking part in every good work, whenever possible.

Adnan Ahmad Yousif Chairman

Chairman’s Message

13

The Board of Directors Report for 2009

14


“Our Lord! make not our hearts to deviate after Thou hast guided us aright,and grant us from Thee mercy; surely Thou art the most liberal Giver.”

Allah the Almighty has spoken the truth

Verse No. 8, Surat Al-Emran

Assalmu Alikum Wa Rahmtu Allah Wa Baraktu,

All Praise be to Allah, Lord of the Worlds,And Prayers and Peace be upon Mohammedhis Servant and Messenger.

Dear Shareholders,

In 2009, the Bank celebrated its 30th anniversary since the commencement of its activities, proving throughout its progress the profound experience of the Islamic banks and the capability of the economic fundamentals in the Islamic Sharia to effectively deal with the recent developments. Throughout its course of business, the Bank has been keen to ensure that people have easy access to its services. To this end, the Bank’s branch network expanded at a relatively fast pace to comprise (57) branches and (12) offices at the end of 2009 covering all regions of the Kingdom. The number of employees went in parallel with the development witnessed by the Bank until they totaled (1755) employees by the end of 2009. In addition, automated teller machines (ATMs) were distributed and connected to the Jordanian Network of Automated Teller Machine, which in turn is connected to the Visa Global ATMs Network outside Jordan. The number of these ATMs reached (76) by the end of 2009.

The Bank kept pace with the state-of-the-art banking technologies. Most of computer and internet technologies were introduced to the Bank’s business and operations, and branches and automated teller machines were electronically linked. In addition, fast transfers service was introduced, the electronic clearing service replaced the automated clearing service and the bankcards service (Visa, MasterCard, Visa Electron) has been expanded, where the number of valid cards amounted to approximately (267) thousand cards by the end of 2009.

The Bank started with a capital of JD four million in 1979 and has recently become one hundred million JD. The shareholders’ equity grew until it reached nearly JD (176.8) million by the end of 2009.

Since 1989, the Bank has been ranked third among the banks sector in Jordan, which are currently (23) banks. The Bank’s total assets accounted for nearly (7.7%) of the total assets of the banking sector. The total balances of its saving schemes accounted for approximately (10.8%) of the total client deposits of the whole banking sector. Moreover, the Bank’s total balances of financial investments accounted for about (11.7%) of the total direct credit facilities of the banking sector.

With the grace of Allah and the people’s support; the Bank has played an effective role in the economic and social life. As for the mobilization of national savings, the Bank has been able to attract various segments of the society to deal with, especially small deposit owners. Therefore, the Bank has a broad depositor base. The active accounts exceeded (736) thousand accounts by the end of 2009, with an average balance of around JD (2900) per account.

The Board of Directors Report for 2009

15

The Bank directs these deposits towards investments directly flowing into the development channel, providing job opportunities that reduce unemployment and contributing to the development of national exports and foreign currencies flow to the national economy. It provides finance for various social and economic activities, benefiting many health, educational, industrial, services, commercial, housing and other facilities. The Bank continuously identifies the basic and essential needs of citizens and seeks to meet them through its branches spreading in the Kingdom’s various regions on terms suitable for their circumstances. Thus, we find that the Bank’s financial investments are made up mostly of relatively small projects and operations that benefit large numbers of citizens in the Kingdom. This is evident in the cumulative number of Murabaha financing operations executed by the Bank in the local market till the end of 2009, which amounted to about (563) thousand processes with a total value of approximately JD (5.3) billion, i.e. the average value of one transaction was only about JD (9.5) thousand. Among the needs that seem necessary for citizens are housing, transportation, and furniture. Total cumulative financing provided for these purposes accounted for around (41.8%) of total Murabaha financing, and nearly (73.1%) of the cumulative number of Murabaha financing transactions. In addition, the Bank provides financing to professionals such as doctors, pharmacists, engineers and craftspersons.

Moreover, nearly (90%) of the existing operations for accounts receivable of Murabaha financing at the end of 2009 are accounts receivable of operations, of which the financing per operation does not exceed JD (40) thousand.

The Bank continued its social role and contribution to fostering interdependence and solidarity relationships among society individuals. It also reiterated its Islamic and humanitarian mission through sponsoring activities of social nature, participating in such activities and supporting them. The total donations provided by the Bank for various charitable activities by the end of 2009 amounted to around JD (5.7) million, while the good loans (Al-Qard Al-Hasan) provided for justified social purposes amounted to JD (109.4) million benefiting nearly (238) thousand citizens. The mutual insurance fund sponsored by the Bank compensated (1078) death and total disability cases of the Bank debtors with a total amount of around JD (2.9) million by the end of 2009. In the same context, the Bank provides training opportunities within its premises for students of various educational institutions, where the total number of trainees amounted to (10535) by the end of 2009.

Dear Shareholders,

Certain indicators have shown signs of recovery in the global economy, including improved indicators of global stock prices. This recovery came after more than a year since the beginning of the global financial crisis and high oil prices that stabilize most of the time above the level of seventy dollars per barrel after they declined in the beginning of the crisis to less than forty dollars per barrel. However, this recovery appears to be slow, and some fear that these indicators are deceptive and result in compromising international commitments agreed upon in the G20 meetings to reorganize, revitalize and reform the global financial system, as well as undermining the plans and procedures of developed countries to overcome the crisis and mitigate its effects.

Many attribute the origin of the crisis to the accumulated imbalances in the US economies known by then as mortgage crisis, before turning into a major global economic crisis ravaging the economies of both developed and developing countries, leading to the collapse of a group of banks and financial institutions and causing chaos in the financial markets. This resulted in the sharp decline in global stock prices, large fluctuations in the prices of major currencies against each other and significant reduction in interest rates. For example, the price of interest on the U.S. dollar has been reduced to between (0 - 0.25%).

At the regional level, the hotbeds of tension in our region remained blazing during 2009. Occupation is still dominating Palestine and Iraq in addition to anxiety, fear, concern and bloodshed accompanying this situation. Despite the implications of these events surrounding Jordan, the initial estimates indicate positive growth in the real Gross Domestic Product. During the first three quarters of 2009, the growth rate was about (2.7%) against (9.1%) during the same period of the previous year. Estimates indicate that this growth will reach nearly (3%) by the end of 2009. The inflation rate during 2009 has been negative as it reached (0.7%) compared to (13.9%) during 2008. This was due to the price reduction of commodity and imported oil after the recent economic events.

16

The net public debt has risen by the end of November 2009 compared with its level at the end of 2008 by JD (1099.8) million, or at (12.9%), to reach about JD (9651) million.

During 2009, the trading volume of Amman Stock Exchange recorded JD (9.7) billion, with a decrease of around JD (10.6) billion or at (52.4%) compared to the volume of the same period in 2008. The market-value weighted index of free shares has decreased by (224) points or at (8.1%) to reach (2534) points by the end of 2009.

With regard to the monetary policy, the Central Bank of Jordan (CBJ) continues its policy that aims at consolidating monetary stability and maintaining an appropriate level of foreign currency reserve to strengthen confidence in the Jordanian Dinar as well as a relative stability in prices level. As a result, the reserves reached around USD (10.9) billion at the end of 2008, with an increase of around USD (3.1) billion beyond its level at the end of 2008.

The policy of dinar-dollar peg which began in 1996 was maintained at JD (0.708) for buying and JD (0.710) for selling per one USD, allowing the JD to fluctuate against other foreign currencies according to the exchange rate developments of these currencies in the international markets. In light of the financial crisis, the US dollar exchange rate experienced significant fluctuation against other currencies, resulting in fluctuation in JD exchange rate as it reached nearly (0.944) Euro by the end of November 2009, although it reached about (1) Euro at the end of 2008. To cope with the reduction in the USD interest rate, to encourage investment and to accelerate the national economy wheel, the CBJ reduced the rediscount rate on the Jordanian Dinar three times during 2009. The last reduction was made on 20 December 2009 until it reached (4.75%) after it was (6.25%) at the end of 2008. The weighted average of interest rates on loans and advances decreased during 2009 by about (41) base points to reach (9.07%). Despite the current obstacles, the Bank managed by the success granted by Allah to achieve new growth in its various activities. The Board of Directors is pleased to introduce you to the most important achievements in 2009 as well as the future ambitions.

First: Capital

The decision of the extraordinary General Assembly held on 27 February 2009 was implemented, i.e. increasing the capital by JD (18.75) million to become JD (100) million instead of JD (81.25) million. Such increase was made by capitalizing JD (8.75) million of retained earnings, capitalizing JD (10) million of voluntary reserve and distributing bonus shares to shareholders at the increase amount, each by his contribution to the capital, on 9/9/2009.

Second: Branching

During 2009, the branch “Khalda/Amman” was opened as well as the two offices “Al Hurryah St./Mqabaleen” and (Yasmeen District/Nazal District”. Thus, the Bank’s network of branches currently comprises (57) branches and (12) banking offices. It is decided to open the branch of “Al-Shouna Al-Shamalia/Irbid” and the office of “Sama Al Rosan/ Irbid” on 11/1/2010, and to turn “Al Qaser/ Kerak” Office into a branch on 1/2/2010. In addition, it is expected to complete the process of turning “Dlail/Zarqa” office into a branch.

Third: Staff

At the end of 2009, the number of the Bank’s staff reached (1755), with an increase of (99) employees compared with 2008. Below is a figure showing the increase of the employees’ number over the past ten years:

Number of branches and offices

17

Out of its interest to improve the employees’ performance, the Bank delegates some of its employees for academic qualification in majors related to Islamic banking industry. During 2009, the number of graduate employees reached (12) distributed as follows: (2) PhD, (5) M.A., (6) B.A., and (1) Diploma.

In the field of training employees, the Bank nominated (2803) employees during 2009 to attend courses and seminars organized by the Bank Training Institute as well as specialized centers and organizations inside and outside Jordan, compared to nominating (3021) employees in 2008. Below is a description of this training:

20082009

Description Number of participants

Number ofcourses/seminars

Number of participants

Number ofcourses/ seminars

26501702313166The Bank’s Training Institute

347151468180Centers in Jordan

24202216Centers Abroad

30213412803362Total

These courses and seminars covered various banking, financial and administrative activities and businesses, including deposits, credits, bills of exchange, guarantees, investment, financial analysis, job behavior and English language. There are also courses focusing on Sharia affairs, accounting standards of Islamic financial institutions, banking risk analysis, total quality and money laundering. Moreover, newly appointed employees receive practical training in branches.

The Bank also continued to provide training opportunities and introduce its business to new groups of educational institutions students. The number of those students reached (705) throughout 2009, compared to (525) students in 2008.

Fourth: Banking Techniques:

During 2009, the Bank accomplished further development and updating in the field of banking techniques, most notably:

Completion of preparations to apply the new banking system “ICBS”, including establishment of connection systems between this new system and the current banking system “JIB”.

Modernization of (32) Automated Teller Machines (ATM), in addition to the installation and operation of new seven (ATMs) during 2009. Thus, the Bank’s network of ATMs consists of (76) machines, all connected to client accounts and the Jordanian Automated Teller Machines Network (JONET) in the Kingdom, which comprises nearly (1050) ATMs. In addition, the Bank’s network of ATMs is linked through JONET to the International Visa Network outside Jordan.

0200400600800

10001200140016001800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EmployeesEm

ploy

ees

No of branches and o�ce

61 67 65 64 64 64 63 65 66 69

18

Expansion in providing Short Messages Services (SMS) to inform the client of the transactions of her/his account. Developing and upgrading the systems, networks and devices of different banking techniques.

Fifth: Incentive Awards

Since 1997, the Bank has continued to distribute awards to holders of Savings Accounts with a total value of around JD (150) thousand to cover the costs of Haj and Umra as well as other awards.

At the beginning of 2008, the Bank introduced awards to be distributed to users of ATM cards, by providing clients with a percentage of their monthly purchases, with a total value of JD (100) thousand per year, in addition to providing other in-kind prizes with a total value of JD (20) thousand per year.

It is known that the Bank incurs the value of all these awards from the funds of shareholders in accordance with the Fatwa issued in this regard.

Sixth: Social Role of the Bank

The Bank has continued to assume its social and cultural responsibilities, consolidate the Islamic values in the normal banking transactions and positively interact with the activities of social nature. Below are some examples of the Bank’s activities in this field during 2009:

A- Conferences and SeminarsThroughout 2009, The Bank continued to participate in conferences and seminars organized by the Islamic Development Bank, Al Baraka Banking Group, the General Council for Islamic Banks and Financial Institutions (CIBAFI), the Islamic Financial Services Board (IFSB), Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and AlBaraka Annual Fiqh Seminar. In addition, the Bank has been keen to participate in conferences and seminars that aim at disseminating and developing the business of Islamic banks.

B- Scientific Research and Professional TrainingThe Bank continued its activities in scientific research and training. The total expenditures on such activities in 2009 reached around JD (178.8) thousand distributed as follows:

JD/ThousandDescription

13,623Direct expenditures of the Bank Training Institute

100,426Contribution to the costs of employees> study and training

29,402Participation in the expenses of the Banking Studies Institute affiliated to the CBJ

36,376Donation and sponsorship of scientific conferences and educational institutions

178,827Total

C. DonationsThe Bank continued to support many social and cultural events and provide donations for different relevant activities. Those events include the Jordanian Hashemite Fund for Human Development (JHFHD), King Abdullah Fund For Development– poverty areas, Al Aman Fund for the future of Orphans, Jordanian Hashemite Charity Commission, Associations of Holy Quran Memorization and collective wedding parties organized by Al-Afaf Charity Association.

The total donations provided by the Bank during 2009 for such events and activities reached JD (270,1) thousand, distributed as follows;

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Total (JD/Thousand) NumberDescription

55,9962Jordanian Hashemite Fund for Human Development (JHFHD)

29,5001Al Aman Fund for the Future of Orphans

48,5008Associations and competition of Holy Quran Memorization

50,30055Charity Associations and Organizations and Zakah committees

36,37611Scientific Conferences and educational and cultural programs

49,418108Mosque Commissions

270,090185Total

D- Al Qard Al Hasan :The Bank continued to receive deposits in “Al Qard Al Hasan Account” from those wishing to lend such deposits through the Bank as good loans. At the end of 2009, the balance of this account reached around JD (616) thousand.

The Bank also continued to provide good loans for justified social purposes, such as education, medical treatment and marriage. The loans provided by the Bank in 2009, from the fund and the money allocated for this purpose, reached around JD (13) million benefiting nearly (23) thousand citizens, compared to JD (21.8) million in 2008 benefiting nearly (19.3) thousand citizens.

It is worth mentioning that some of these loans are granted for youth about to get married in cooperation with Al Afaf Charity Association. The total of such loans in 2009 reached about JD (175) thousand benefiting about (355) young people, compared to around JD (175) thousand in 2008 benefiting about (336) young people.

E- Funding Professionals and Craftsmen:The Bank continued the implementation of its program introduced in 1994 in relation to financing the projects and requirements of professionals and craftsmen by means of (Musharaka). The number of projects financed in this way reached (79) projects by the end of 2009. The total finance provided for such projects reached around JD (1.75) million, in addition to the finance that the Bank provides for this category by way of (Murabaha).

F- Mutual Insurance Fund:The Bank continued to sponsor the Mutual Insurance Fund for the Bank debtors created in 1994. Through this fund, participants share in indemnifying part of the damage that may be inflicted on any of them to repay all or some of his debt to the Bank in certain cases. Throughout 2009, the number of indemnified cases reached (103), and the compensations paid in this year amounted to nearly JD (374) thousand. Since the Fund establishment until the end of 2009, the total compensation cases reached (1078) cases, and the amount of compensations paid reached around JD (2.9) million. At the end of 2009, the Fund’s balance amounted to around JD (25.6) million, with about (114.6) thousand participants and a total balance of indebtedness of around JD (411.7) million against the Fund’s balance of around JD (22.36) million, with about (100) thousand participants and a total balance of indebtedness of around JD (321) million in 2008.

It is worth mentioning that the Bank has expanded the umbrella of the insured people as of August 1, 2007, to include all people with indebtedness of JD (40) thousand or less, instead of JD (25) thousand or less. As of January 1, 2010, this insurance will be applied to all individuals whose indebtedness is JD (50) thousand and less.

20

Financial Position

21

Seventh: Financial Position

A- Total Assets:At the end of 2009, the total assets amounted to around JD (2,472) million, compared to JD (2,170) million at the end of 2008, with a growth rate of around (13.9%). Following are the relevant details in million JD:-

YearTotal of

Balance Sheet Items

Off-Balance Sheet ItemsTotalRestricted

InvestmentsMuqarada

BondsInvestment by Proxy

Total

2009 2,183.1 52.2 226.9 9.5 288.5 2,471.5

2008 1,848.4 88.0 224.5 9.4 322.0 2,170.3

Increase (Decrease)

334.7 (35.9) 2.4 0.01 (33.5) 301.2

18.1% (40.7%) 1.1% 0.1% (10.4%) 13.9%

B- Cash on Hand and with BanksAt the end of 2009, the total cash on hand and with banks amounted to about JD (877.5) million, compared to JD (689.5) million at the end of 2008, i.e. an increase of around JD (188) million.

C- Financing and InvestmentAt the end of 2009, the total balances of financing and investment amounted to around JD (1,557) million, distributed to (128.3) thousand transactions compared to around JD (1,413) million at the end of 2008, distributed to (108.3) thousand transactions.

Financial Position

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Assets

0

500

1000

1500

2000

2500

Mill

ion

JD

22

Following are the details of those balances in million JD:Accounts invested for the benefit of third party

Receivables and Joint Investment Self- Finance and

Investment of the Bank

Year

Invest-mentby

ProxyIn

ForeignMarkets

Muqarada bonds

In “localmarket“

Restricted Investments

Total In

Foreign Markets

In Local Markets

Total

Investment Deposits

with Islamic Banks

In Foreign Market

In Local Markets

Total In

Foreign Markets

In Local Market

9,5186,651,248,52,61,295,251,563,71,180,014,12,711,42009

9,4160,685,383,41,81,147,442,627,21,077,69,92,17,82008

0,0126,1(34,1)(34.9)0,8147,89,036,5102,44,20,63,6Increase(Decrease) 0,1%16,2%(%40,0)(%41,8)41,8%12,9%21,0%134,3%9,5%42,8%29,0%46,5%

The financing operations carried out by the Bank in the domestic market during 2009 included various social and economic activities and utilities. Such finance was provided to some health facilities (hospitals, clinics and pharmaceutical companies), educational facilities (universities, schools and institutes), many industrial and real-estate projects and transportation means in addition to the finances provided by the Bank to the commercial sector.According to the approved classification of the CBJ, the shares of economic sectors from the financing balances (in million JD) are as follows:

TotalOther

Purposes

Public Services & Facilities

Tourism, Hotels, &

Restaurants

Transportation Services

ConstructionGeneral Trade

Industry & Mining

AgricultureYear

1,078,1100,916,43,9207,0357,6347,114,33,92009

943,546,57,00,4174,2274,2375,353,412,52008*

* 2008 data was reclassified to match the CBJ classification of 2009 data.

The Bank pays special attention to the basic needs of citizens in the financing operations. Following is a description of Murabaha Financing provided from the funds of joint investment and investment portfolios during 2009 for the most significant needs:

0200400600800

1000120014001600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Investment and Financing Balances

Deals in thousand

54.5 52.5 55.3 62.6 67.3 77.6 84.0 96.6 108.3 128.3

Mill

ion

JD

General Trade34.7%

Industry & Mining1.33%

Others9.36%

Public services&

Facilities1.52%

TourismHotels

Restaurants0.36%

Transportations19.20%

Agriculture0.36%

Constructions33.17%

General Trade39.78%

Industry & Mining5.66%

Others4.92%

Public services&

Facilities0.74%

TourismHotels

Restaurants0.04%

Transportations18.47%

Agriculture1.33%

Constructions29.06%

2008 2009

23

Financed Needs of Individuals JD (Million)Number of beneficiaries

of Financing

Land, housing and construction materials 132.8 17026

Means of transport and construction vehicles 152.2 21311

Furniture 13.0 4377

The outstanding balance of Murabaha financing allocated for such needs from the funds of joint investment and investment portfolios by the end of 2009 was as follows:

Financed Needs of Individuals JD (Million)Number of beneficiaries

of Financing

Land, housing and construction materials 351.6 44622

Transportation means and construction vehicles 290.0 52010

Furniture 26.4 12456

Moreover, the Bank continued to direct a significant part of joint investment funds to be invested in the capitals of national companies whose main business does not include any Sharia non-compliant activities, and which produce commodities and provide services useful to the society and the national economy. At the end of 2009, the number of companies whose capitals are invested in by the Bank reached (32), and the volume of such investment reached nearly JD (58.2) million.

D- Attracting Savings:At the end of 2009, the total balances of saving schemes amounted to around JD (2,188) million, distributed to (736·3) thousand active accounts, compared to around JD (1,882) million at the end of 2008, distributed to (702.3) thousand active accounts. Following are the details of the account balances of such schemes in million JD:

Invest-ment by Proxy“Foreign”

“Muqarada” Bonds

“Local”“

Restricted InvestmentsUnrestricted Investments

Cash Deposits

Banks Secretariat

Year Total ForeignLocalTotal ForeignLocalTotal ForeignLocalTotal ForeignLocal

9,5197,252,249,42,81,295,7140,31,155,432,65,24,50,7595,243,5551,72009

9,4194,288,086,02,01,026,5115,7910,88.32,78,57,41,1522,230,20492,02008

0,013,0(35,9)(36,6)0,7269,124,5244,6(0,2)(3,3)(2,90(0,4)73,013,459,6Increase (decrease) 0,1%1,5%(40,7%)42,6%)37,2%26,2%21,2%26,9%(0,5)%(39,0)%(38,8%)(40,6)%14,0%44,3%12,1%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Saving Schemes Balances

No of existing accounts in thousands

497.9 524.6 548.5 545.3 543.0 578.5 597.6 632.9 702.3 736.3

0

500

1000

1500

2000

2500

Mill

ion

JD

24

E- Shareholders’ Equity:By the end of 2009, the shareholders’ equity reached around JD (177) million compared to JD (161) million at the end of 2008. The details are as follows in million JD:

Retained Earnings

Fair Value Reserve- Net

Reserve of General Banking

Risks

Special Reserve

Voluntary Reserve

Statutory Reserve

Paid-up Capital

Year

38,672,120,703,015,9226,41100,002009

39,681,980,603,0112,0622,4181,252008

(1,01)0,140,100,006,144,0018,75Increase (decrease) (2,5%)7,1%16,7%0,0%(50,9%)17,9%23,1%

The ratio of capital adequacy at the end of 2009 amounted to about (14.47%) according to the CBJ standards, and around (33%) according to the standards of the Accounting and Auditing Organization for Islamic Financial Institutions.

F- Profits of Joint InvestmentThe total profits of joint investment during 2009 reached around JD (99.82) million compared to around JD (101.75) million during 2008. These profits were distributed in accordance with the law and as per the decisions of the Board of Directors as follows:

In Foreign Currencies (equivalent to million JD)In Local Currency (million JD)

Year Share of

UnrestrictedInvestmentAccounts

Share ofthe Bank

as a CapitalOwner

Shareof the

Bank as aSpeculator

Shareof the

InvestmentRisks Fund

Total

Share ofUnrestrictedInvestment Accounts

Share ofthe Bank

as a CapitalOwner

Shareof the

Bank as aSpeculator

Shareof the

InvestmentRisks Fund

Total

1,270,010,640,212,1439,5519,0629,319,7797,682009

2,400.061.230,414,1131.5627.0329.299,7697.642008

(1,13)(0,05)(0,590(0,20)(1,97)8,00(7,97)0,010,000,04Increase (decrease) (47,1)%(81,9%)(47,9)%(47,9)%(47,9%)25,3%(29,5%)0,0%0,0%0,0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Shareholdings Equities

0

20

40

60

80

100

120

140

160

180

Mill

ion

JD

25

The rates of profits distribution of 2009 were as follows:

SavingsNoticeTermGeneral

PercentageCurrency

2,85%3,98%5,12%5,69%Local Currency

0,625%0,875%1,125%1,25%Foreign Currencies

G- Bank Profits:In 2009, the Bank’s profits before tax amounted to around JD (38.92) million, while the profits after tax amounted to around JD (27.89) million. The details are shown in million JD as follows:

ProfitAfterTax

ProfitBefore

Tax

ExpensesRevenues

Year

VariousAllowances

andLosses (surplus)

offinancialAssets

Impairment

Depreciations,Amortizations

andother

Expenses

EmployeeExpenditures

OtherRevenues

Revenuesof Banking

Servicesand Profitsof ForeignCurrencies

Bank’sShare ofProfits of

Investments by Proxy

Bank’sShare of

InvestmentPortfolios/Muqarada

Bonds

Bank’sShare ofProfits ofRestricted

Investments/Allowance

Bank`sShare as aSpeculator

Bank`sShareAs a

CapitalOwner

BankSelf-

profits

27,8938,92(1,83)12,4218,412,9712,200,053,130,1229,9519,070,0422009

35,1450,063,9112,9016,603,1413,810,058,140,4430,5327,090,282008

(7,25)(11,15)(5,74)(0,48)1,80(0,17)(1,61)0,00(5,00)(0,32)(0,58)8,02)0,14Increase (decrease) (20,6%)(22,3%)(146,8%)(3,7%)10,9%(5,4%)(11,6%)0,0%(61,5%)(73,6)(1,9%) (29,6%)49,1%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Joint Investment Pro�le

General Percentage of pro�ts distribution on account forign currencies

General Percentage of pro�ts distribution on account local currency

4.1% 2.66% 1.42% 1.16% 1.33% 1.87% 3.17% 3.50% 2.71% 1.25%

4.32% 4.30% 4.10% 4.49% 5.50% 5.01% 5.05% 5.30% 5.70% 5.69%

0

20

40

60

80

100

120

Mill

ion

JD

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Pro�ts before tax

pro�ts before tax average of paid up capital

0

10

20

30

40

50

60

10.05%3.59% 7.91%

12.53% 11.90%

49.11%44.90%

53.23%

68.46%

42.94%

Mili

ion

JD

26

(1) Including the total of balance sheet and the balances of accounts managed in favor of third parties which appear as off-balance sheet items (restricted investments, Muqarada bonds and investment by proxy)

(2) Including the balances of secretary, unrestricted investments, cash margins, banks, restricted investments, Muqarada bonds and investment by proxy.

(3) Including the balances of financing, self-investment, receivables, joint investment, investment deposits with the Islamic banks and the invested balances of accounts managed in favor of third parties, “restricted investments, Muqarada bonds and investment by proxy”.

Development of the Bank’s Operations in the Past Ten Years(Amounts rounded to million USD)

Fiscal year

Total Assets

(1)

Saving Schemes(2)

Financing & Investment(3)

Paid-up Capital

Shareholders’ Equity

Joint Invest-ment Profits

Joint invest-ment

risks fund

Profit Before

Tax

Profit After Tax

General percentage

of profit distribution to local currency

accounts

General percentage

of profit distribution to foreign currency accounts

Percentage of dividends to shareholders

Number of branches

and offices

Number of employees

Total BalancesNo. of Active

Accounts (thousands)

Total BalancesThousand

transactions

2000 828,3 749,1 497,9 611,1 54,4 38,5 54,5 29,8 25,0 3,0 2,2 4,32% 4,18% 5% in cash (4) 61 1395

2001 901,7 836,5 524,6 651,7 52,5 38,5 53,6 27,1 26,9 1,4 1,0 4,30% 2,66% 3.8961% stocks (5)

67 1440

2002 1,029,7 955,5 548,5 722,2 55,3 40,0 55,6 28,5 31,0 3,1 2,1 4,10% 1,42% 5% in cash 65 1402

2003 1,159,2 1,076,4 545,3 695,8 62,6 40,0 57,0 32,5 22,1 5,0 3,3 4,49% 1,16% 5% in cash 64 1377

2004 1,301,4 1,202,5 543,0 759,8 67,3 40,0 58,2 36,2 24,0 4,8 3,4 5,50% 1,33% 5% in cash 64 1418

2005 1,568,4 1,421,1 578,5 875,8 77,6 40,0 69,4 53,4 19,2 19,6 13,1 5,01% 1,87% 25% stocks (6) 64 1457

2006 1,726,0 1,525,8 597,6 1,031,2 84,0 64,1 115,3 61,2 21,3 23,4 15,5 5,05% 3,17% 10% in cash 63 1498

2007 1,927,3 1,676,8 632,9 1,229,3 96,6 65,0 133,5 75,5 20,2 34,4 23,0 5,30% 3,50%12% in cash

25% stocks (7) 65 1611

2008 2,170,3 1,881,7 702,3 1,412,5 108,3 81,3 161,0 101,8 22,9 50,1 35,1 5,70% 2,71%15% in cash23.076923%

stocks (8) 66 1656

2009 2,471,5 2,187,5 736,3 1,556,6 128,3 100,0 176,8 99,8 20,7 38,9 27,9 5,69% 1,25%12% in cash

(9) 69 1755

27

Development of the Bank’s Operations in the Past Ten Years(Amounts rounded to million USD)

Fiscal year

Total Assets

(1)

Saving Schemes(2)

Financing & Investment(3)

Paid-up Capital


Joint Invest-ment Profits

Joint invest-ment

risks fund

Profit Before

Tax

Profit After Tax

General percentage

of profit distribution to local currency

accounts

General percentage

of profit distribution to foreign currency accounts

Percentage of dividends to shareholders

Number of branches

and offices

Number of employees

Total BalancesNo. of Active

Accounts (thousands)

Total BalancesThousand

transactions

2000 828,3 749,1 497,9 611,1 54,4 38,5 54,5 29,8 25,0 3,0 2,2 4,32% 4,18% 5% in cash (4) 61 1395

2001 901,7 836,5 524,6 651,7 52,5 38,5 53,6 27,1 26,9 1,4 1,0 4,30% 2,66% 3.8961% stocks (5)

67 1440

2002 1,029,7 955,5 548,5 722,2 55,3 40,0 55,6 28,5 31,0 3,1 2,1 4,10% 1,42% 5% in cash 65 1402

2003 1,159,2 1,076,4 545,3 695,8 62,6 40,0 57,0 32,5 22,1 5,0 3,3 4,49% 1,16% 5% in cash 64 1377

2004 1,301,4 1,202,5 543,0 759,8 67,3 40,0 58,2 36,2 24,0 4,8 3,4 5,50% 1,33% 5% in cash 64 1418

2005 1,568,4 1,421,1 578,5 875,8 77,6 40,0 69,4 53,4 19,2 19,6 13,1 5,01% 1,87% 25% stocks (6) 64 1457

2006 1,726,0 1,525,8 597,6 1,031,2 84,0 64,1 115,3 61,2 21,3 23,4 15,5 5,05% 3,17% 10% in cash 63 1498

2007 1,927,3 1,676,8 632,9 1,229,3 96,6 65,0 133,5 75,5 20,2 34,4 23,0 5,30% 3,50%12% in cash

25% stocks (7) 65 1611

2008 2,170,3 1,881,7 702,3 1,412,5 108,3 81,3 161,0 101,8 22,9 50,1 35,1 5,70% 2,71%15% in cash23.076923%

stocks (8) 66 1656

2009 2,471,5 2,187,5 736,3 1,556,6 128,3 100,0 176,8 99,8 20,7 38,9 27,9 5,69% 1,25%12% in cash

(9) 69 1755

(4) The percentage of (5%) is a net amount for shareholders, as the Bank incurred the distribution tax on behalf of them which is amounted to 10%.

(5) Bonus shares distributed on 18 July 2002(6) Bonus shares distributed on 14 June 2006(7) Bonus shares distributed on 16 July 2008(8) Bonus shares distributed on 10 September 2009(9) Proposed to be distributed.

28

Future Plan of the Bank for the year 2010

29

Eighth: Future Plan of the Bank for the year 2010

1- Continue to diversify and develop banking services.2- Expand the issuance of Muqarada bonds and consolidate dealing with them.3- Expand financing by means of Ijara Muntahia Bittamleek. 4- Seek to issue tradable Islamic bonds. 5-Expand financing programs for professionals, craftsmen and small industries to help in creating new job

opportunities.6- Branching plan:

A- Complete the process of transforming “Al Dalil/ Zarqa” OfficeB- Transform “Jabal Amman/Amman” office into a branch.C- Open a branch in “Wadi AlHajar Area/Zarqa”. D. Open offices in the following areas: 1. Tayybeh District/Irbid 2. AlMarj Area/ Karak. 3. Bsaira District/ Tafeilah

7- Install and operate new ATMs and replace the old ones.8- Continue the processes of developing and updating communication systems, networks and lines as well

as equipment to cope with the modern techniques and development in the Bank operations, including the application of the new banking system «ICBS» and the introduction of new techniques to the banking business.

9- Strengthen and develop the principles of corporate governance at the Bank.10- Continue the application of Basel II requirements.

Future Plan of the Bank for the year 2010

30

Board Recommendations For the Ordinary General Assembly

31

Ninth: Board Recommendations for the Ordinary General Assembly

Dear Shareholders,

We hope that this report gave an overview of the Bank’s activities and achievements during 2009. The Board of Directors is pleased to recommend the following to the General Assembly:

1- Reading the minutes of the General Assembly’s previous ordinary meeting.2- Listening to the report of the Bank’s Sharia Supervisory Board for the fiscal year ended on December 31,

2009.3- Reading, discussing and approving the report of the company’s auditors for the fiscal year ended on

December 31, 2009.4- Considering the report of the Board for the fiscal year ended on December 31, 2009 as well as the future

plan of the company.5- Discussing and approving the annual balance sheet and Profit and Loss Statement, and distributing dividends

at 12% of the capital to shareholders.6- Discharging the Board members for the previous fiscal year.7- Appointing the members of the Bank’s Sharia Supervisory Board.8-Electing the company’s auditors for the upcoming year and determining their remuneration.9- Any other matters suggested by the General Assembly to be included in the agenda in accordance with the

provisions of the law.

In conclusion, we thank and praise Allah for His grants and donations and for the success He granted us. We provoke to Allah the Glorious to give us assistance, help and constant success. We have trust in Allah and we ask His help in achieving our goals and objectives.

We would like to thank the Bank’s shareholders who have participated and still participating in its development, and our generous clients for their trust in the Bank and their eagerness to deal with it to support and consolidate its position. We would like also to thank the executive management and staff who spare no effort to operate, manage and promote its position.

Last but not least, we proudly and appreciably indicate the important role of our respected scholars for their efforts in promoting public awareness of dealing with the Bank. May Allah reward them the best.

We ask Allah to show us the truth and guide us to the right path.

Board of Directors

Board Recommendations for the Ordinary General Assembly

32

Annexesof Board Report 2009

“Disclosure Requirements in the Instructions of

Financial Securities Commission”

33

Annex 1“Disclosure Requirements in the Instructions

of Financial Securities Commission”

1-a. The main activity of the company is the Islamic Banking Industry.b. By the end of 2009, the volume of the company’s capital investment (Shareholders> Equity) reached about JD (176.8) million.c. The statement included at the end of the report indicates the addresses of the Head Office and the branches as well as the number of employees therein.

2- The table below identifies the information related to subsidiaries:

Name of Company

Legal StatusType of Activity

Paid-in Capital(Million

JD)

Percentageof

Contribution %

Number of employees

Auditing fees Address

AlRizq Trading Company

Limited Liability

Commercial 1 90,0 1 1450 Amman

AlOmariah Schools Co.

Limited Liability

Education 4,5 94,8 490 2900Wasfi Attal St./

Amman

AlSamaha Real Estate Co.

Limited Liability

Real Estate 1 100 1 1450 Amman

Future Applied Computer

Technology Co.

Limited Liability

Services 5 100 42 2610Wasfi Attal St./

Amman

Annexes of Board Report 2009

34

Sanabel AlKhair For Financial

Investments Co.

Limited Liability

Brokerage 5 100 16 2320Housing Bank

Complex

3- A-Below are the names of the natural members of the Board of Directors and the representatives of the legal members as well as an introductory brief of each.

Practical Experience Academic Qualification(s)Name of Member

He joined the banking industry in 1975. In 2000, he became the Chief Executive Officer of AlBaraka Banking Group. In 2002, he was appointed the Chief Executive Officer of Bahrain Islamic Bank. On 1st August 2004, he was reappointed as the Chief Executive Officer of AlBaraka Banking Group

Master in Business Administration

H.E. Mr. Adnan Ahmad Yousif AbdelMalek. Bahraini Citizen.Representative of Al-Baraka Banking Group/ Bahrain. Chairman

He joined the banking industry in 1961 and he is currently the Chief Executive Officer and General Manger of the Jordan Islamic Bank. He is also a Board member in a number of Islamic banks outside Jordan as well as Chairman and Board member in a number of industrial, trading, investment, educational and insurance shareholding companies.

-Bachelor of Commerce 1969. Arab University of Beirut

-Master in Business Administration 1979, University of San Francisco, USA

H.E. Mr. Musa Abdelaziz Mohammed Shihadeh. Jordanian Citizen.Chief Executive Officer/ General Manager

He is the former Minister of Awqaf and former Minister of Public Works. Currently, he is a partner in the Jordanian Center for Engineering Consultation.

BSc. Civil Engineering, 1951, Cairo University

H.E. (Eng.) Raef Yousif Mahmoud NajmJordanian Citizen

Former Minister of Finance, Former Minister of Interior and Former Member of the Upper House

Bachelor of Law H.E. Salem Mohammed Salem Massa’deh Jordanian Citizen

A businessman and Board member in a number of companies

Bachelor of Commerce and Business Administration, 1960American University of Beirut

H.E. Kamal Sami Salman Asfour.Jordanian Citizen.

He started his career in ElNilein Bank- Sudan until he became Chairman and General Manager of the Bank. In 1988, he joined AlBaraka Co. for Investment and Development in Jeddah as Deputy General Manager for Banking Coordination. In 1995, he became an Executive Manager in AlBaraka Banking Group- Bahrain, then the Vice Chief of the Group.

Bachelor of Economics, 1965Khartoum University

H.E. Othman Ahmad Suleiman Ahmad. Representative of AlBaraka Banking Group Sudanese Citizen

He has been the Regional Manager of AlRajhi Bank since 1996 and General Supervisor in AlRajhi Co. for Industry and Commerce- AlKhat Presses. Also a Board member in AlSharqiah Agricultural Co.

Master in Business Administration, American University of Beirut in 2006Bachelor of Business Administration, High Institute of Cooperative Studies in Cairo,1986

H.E. Abdellatif Abdallah Abdelaziz AlRajhi.Representative of AlBaraka Banking Group Saudi Citizen.

35

Various banking experiences then a Financial Manger in AlBaraka Banking Group.

-Bachelor of Accounting -Fellowship of Certified Public Accountants (CPA)

H.E. Hamad Abdallah Ali Eqab. Representative of AlBaraka Banking GroupBahraini Citizen

Former member of Amman Chamber of Industry and Commerce and Head of Amman Chamber of Commerce.

Bachelor of EconomicsH.E. Haidar Issa Murad MuradJordanian Citizen

He is a Board member in a number of companies in Jordan and Palestine. He is also a Financial Manager of the Middle East and North Africa in the Global Investment House.

Master in Business Administration

H.E. Talal Fawzi Mahmoud AlSamhouri Representative of the Global Investment HouseJordanian Citizen

A former employee in Arab Bank during 1995-2006 and joined the Global Investment House in 2006.

-Master in Financial and Banking Sciences , 1994- Bachelor of Business Administration, 1998-Diploma in Financial and Banking Sciences, 1993

H.E. Mr. Ali Suhail Al ShantiRepresentative of the Global Investment HouseJordanian Citizen

Businessman and Board member in many companies.Bachelor of Business Administration, London- 1982

H.E. Mr. Ayman Abdel Kareem BasherHatahitJordanian Citizen

36

B. Below are the names and positions of the senior management with executive authorities as well as an introductory brief of each one:

Practical Experience Academic Qualification(s)Names of the Senior

Management Members

He joined the Central Bank of Jordan in 1967 and moved to the Jordan Islamic Bank in 1979. Currently, he is the Chairman or Board member of a number of companies.

Bachelor of Commerce/ Accounting, 1967- Ain Shams University

Mr. Saleh Musa AlShantirDeputy General Manager

He started his banking career in 1974. In 1982, he moved to the Jordan Islamic Bank. In 2005, he was promoted to Assistant General Manager. He is currently a Board member in one of the companies.

Bachelor of Economics and Political Sciences, 1971

Mr. Wael Mohammed Musa BarakatAssistant General Manager

He started his career in 1973 as an auditor. In 1974, he joined the banking industry and in 1982 he moved to the Jordan Islamic Bank. Currently, he is holding the position of Assistant General Manager and Board member in one of the companies.

-Bachelor of Commerce in 1973, Ain Shams University- Certified Auditor

Mr. Nabil Mostafa Hussein AsaadAssistant General Manager

He joined the banking industry in 1974. In 1980, he joined Jordan Islamic Bank. Currently, he is holding the position of Assistant General Manager and a Board member in one of the companies.

-Bachelor of Business Administration, 1986- Arab University of Beirut-Higher Diploma in Banking and Finance, 1978- Institute of Banking Studies, Amman

Mr. «Mohammed Majed» Mahmoud AllanAssistant General Manager

He started his career in 1982 in a Kuwaiti company and then in a Saudi company in 1986. In 1990, he joined one of the Jordanian banks. In 1993, he joined the computer office in the Jordan Islamic Bank. He is currently an Assistant GeneralManager for Computer Affairs and supervises the management of Fact Co. one of the Bank subsidiaries. He is also a Board member in more than one company

Bachelor of Computer Sciences and Business Administration, 1981- University of Livingston, USA

Mr. Omar Rebhi JabariAssistant General Manager

He joined the Bank in 1987 and currently holds the position of Assistant General Manager. He is also a Board member in more than one company.

-PhD .Islamic Banks-Arab Academy forBanking and Financial Sciences2006 ,-Master of Banking and Finance / Islamic Banks- Arab Academy for Banking and Financial Sciences, 1994-Bachelor of Accounting/Economics andStatistics ,University of Jordan1985 ,

Dr. Hussein Said «Amar Saifan»Assistant General Manager

37

Practical Experience Academic Qualification(s)Names of the Senior

Management Members

He joined the Bank in 1979. He was holding the position of Retail Financing Manager before retirement.

Diploma in Commerce and Offices Administration

Mr. Rohi Hassan AshourExecutive Director “A”

He joined the Jordan Islamic Bank on 23.06.1987 and is currently holding the position of Executive Manager in the Investment and Investment Funds and Portfolios Dept. He is a Board member in more than one company.

-Bachelor of Economics,1979-Master degree in Islamic Banking,1995-PhD degree in Islamic Banking, 2009

Dr. Hosni Abdelaziz Hussein JaradatExecutive Director “B”

He joined the banking industry in 1970 and the Jordan Islamic Bank in 1992. He is currently holding the position of Banking Cards and Electronic Services Manager

Bachelor of Accounting, 1970- Alexandria University

Mr. Saadi Abdel Rahman QattawiExecutive Director “B”

He worked as an external auditor from 1980 to 2000. He joined the Bank in 2000 and is currently holding the position of Internal and Sharia Audit Manager, and a Board member in more than one company.

Bachelor of Accounting, 1980- Suleimaniah University,Certified Auditor (JCPA)

Mr. Baseem Musa AssiExecutive Director “B”

He joined the Bank in 1982 and currently he is holding the position of Internal Control Manager.

High School Certificate, 1970Mr. Abdelkarim Ibrahim Mahmoud WahbehExecutive Director “C”

He joined the Bank in 1983 and is currently holding the position of Branches Networks & Banking Marketing Department Manager.

-English Language Diploma, 1973 -Bachelor of Information Systems, 2005

Mr. Mahmoud Mohammed Mahmoud JarwanExecutive Director “C”

He worked in local and foreign banks for 15 years and joined the Bank in 1991. He is holding the position of Human Resources Department Manager

Bachelor degree in Business Administration/Accounting, 1975

Mr. Ahmad Mustafa Mohammad BahbouhExecutive Director “C”

He worked in local and foreign banks for 13 years and joined the Bank in 2003. He is holding the position of Retail Financing Department Manager

Bachelor degree in Economics and Finance, 1986

Mr. Bashir Abde Rabo AlHaj Bashir OkashehExecutive Director “C”

He previously worked in the Bank in the Information Technology Department for 4 years, then he worked in AlRajihi Consulting and Bank/KSA. In 2009, he rejoined the Bank holding the position of Strategic Planning Group Executive Manager.

Bachelor degree in Computer Engineering, 1990

Mr. Nai’m Mohammad Najem AlKhmousExecutive Director “C”

38

4- Following are the names of shareholders who own 5% or more:

Name Number of Stocks by the end of 2009 Number of Stocks by the end of 2008

AlBaraka Banking Group Co./Bahrain

66,005,000 47,706,231

Global Investment House Co./Kuwait

32,840 9,222,737

5- The company’s market share of banks’ activities in Jordan at the end of 2009 were as follows:

Total Assets at our Bank/ Total Assets of the banks 7,7%

Total Balances of savings schemes at our Bank/ Total client deposits at banks 10,8%

Total balances of financing and investment at our Bank/ total direct credit facilities of banks 11,7%

6- There is no reliance on specific suppliers and/or major clients (locally and abroad) constituting 10% and more of the total sales and/or purchases.

7- The company does not enjoy any government protection or privileges. It did not win any patent or franchise.

8- The Government, international organizations or any other institutions have not issued any decisions with any material impact on the company’s work, products or competitiveness.

39

9- (a)

Board of D

irectors

CEO/General Manager

Deputy G

M

Banking Business Group

Supporting Business Group

Strategic Planning Group

Corporate governance

Com

mittee

Nominations &

Remuneration Com

mittee

Risk M

gt. Com

mittee

Credit Facilities C

omm

ittee

Bod Secretariate

Audit C

omittee

Consultants

Asst. G

MA

sst. GM

Asst. G

MA

sst. GM

A

sst. GM

Corporate

FinanceD

ept.

Investment

funds &Portflios

Dept.

Follwo-U

pC

ollectionD

ept.

Retail

FinancingD

ept.

ElectronicC

ards&

ServicesD

ept.

Treasury &B

ankingR

elationsD

ept.

Banking

Busniess

Analysis

PoliciesProcedures&

Quality

Dept.

ProductsD

evelopment

Dept.

ITD

ept.vH

RD

ept.A

dmin.

Affairs

Dept.

PublicR

elationsD

ept.

EngineeringD

eptFinancialC

ontrolD

ept

Central O

ps. D

ept.

Clints

ServicesFllow

e-upU

nit

LegalD

ept.B

ranchesN

etwork &

B

anking M

arketingD

ept.

Internal Control D

eptC

ompliance D

ept.R

isk Mgt. D

ept.

Internal & Sharia Audit Dept.

Sharia Supervisory B

oard

Organiztional Structure of Jordan Islam

ic Bank

40

(b) At the end of 2009, the total number of employees was (1755) distributed by academic qualification as follows:

General Secondary Certificate

Diploma Bachelor Master or

CPAPhD

Educated below General Secondary Certificate level

Gross

EmployeesProfessionals/ Technicians

Office boys/Guards

Service workers

Total

131 479 615 61 5 5 88 282 89 464 1755

(C) The Board’s report included qualification and training programs for the Bank staff.

10- There are no direct risks that the company might encounter during the subsequent fiscal year and that have material impact on the company.

11- The Board’s report included the achievements accomplished by the company supported by numbers, and a description of the important events during the fiscal year 2009.

12- There is no financial effect of operations of non-frequent nature, which are not included in the main business activity of the company.

13- Below are the details of realized profits, distributed dividends, net shareholders equity as well as the prices of securities during the years 2005 - 2009:

YearRealizedprofits

(Before Tax)(JD)

Dividends distributed forthe year

(JD)

Net shareholders

equity by the endof the year

(JD)

Prices of issuedsecurities/closing

rate atthe end of the year

Dinar Fils

2005 19,645,586 Distributing bonus stocks at 25%* 69,401,032 5 490

2006 23,377,702 Distributing JD 6,500,000 at 10% 115,306,999 4 020

2007 34,369,778Distributing JD 7,800,000 at 12% & Distributing

bonus stocks at 25%**133,475,836 5 750

2008 50,060,912Distributing JD 12,187,500 at 15% & Distributing

bonus stocks at 23,076923%***160,989,384 3 700

2009 38,915,617 The BoD recommended the distribution of (12%) in

cash from the capital176,830,597 3 170

* Distributed on 14 June 2006** Distributed on 16 July 2008*** Distributed on 10 September 2009

41

14- Analysis of the company’s financial position and the results of its operations:

Year 2009 2008

Shareholders Equity/ Total Deposits 8,08% %8,56

Total Financing & Investment/ Total Deposits 71,16% 75,07%

Total Financing & Investment/ Total Assets 62,98% %65,08

Total Deposits/ Total Assets 88,51% %86,70

Profits before Tax/ Total Assets 1,57% %2,31

Profits before Tax/ Average Shareholders Equity 23,04% %34,00

Profits after Tax/ Average Shareholders Equity 16,51% %23,87

Profits after Tax/ Average Paid-up Capital 30,77% %48,06

15- The Board’s report included the future plan of the company.16- (a) The auditing fees of the company in 2009 reached JD (100) thousand, while the auditing fees of

subsidiaries are disclosed in item (2) above.(b) The total fees of the Sharia Supervisory Board (SSB) during 2009 reached around JD (48,320).

17- (a) Following is a detailed description of the number of securities issued by the company and owned by the Board members and their relatives:

Name Position Nationality Number of shares at the end of 2009

Number of shares at the end of 2008

AlBaraka Banking Group represented by: Bahraini 66,005,000 47,706,331

Mr. Adnan Ahmad Yousif Abdelmalek Chairman Bahraini - -

Mr. Othman Ahmad Suleiman Ahmad Member Sudanese - -

Mr. Abdellatif Abdallah Abdelaziz AlRajhi Member Saudi - -

Mr. Hamad Abdallah Ali Eqab Member Bahraini - -

H.E. Mr. Musa Abdelaziz Mohammed Shihadeh

ViceChairman/

CEOGeneral Manager

Jordanian 96,000 75,000

Spouse of Mr. Musa Abdelaziz Mohammed Shihadeh - Jordanian 6,153 -

H.E. Eng. Raef Yousif Mahmoud Najm Member Jordanian 48,358 34,291

H.E. Salem Mohammed Salem Massaedah Member Jordanian 40,769 12,000

Mr. Kamal Sami Salman Asfour Member Jordanian 34,088 27,697

H.E. Mr. Haidar Issa Murad Murad Member Jordanian 7,692 6,250

Global Investment House Company, represented by*: Mr. Talal Fawzi AlSamhouri till 30 / 8 / 2009Mr. Ali Suhail Al Shanti since 27 / 12 / 2009.

MemberMember

Kuwaiti JordanianJordanian

32,840 9,222,737

- -

- -

H.E. Mr. Ayman Abdulkareem Hatahit Member Jordanian 10,769 8,750

* His Excellency Mr. Samer “Mohammad Emad” Aboushi represented the company during the Board two meetings held on 30/9, 15/12, and he does not own any of the Bank shares.

42

(b) The following detailed table identifies the number of financial securities issued by the company and owned by the senior management with executive authority and their relatives “wife and minor children” in details:

Name PositionNumber of shares at the end of 2009

Number of shares at the end of 2008

1- Mr. Saleh Musa AlShantir Deputy Manager General 43,252 35,143

Spouse of Mr. Saleh Musa AlShantir - 1,833 1,490

Sons of Mr. Saleh Musa AlShantir - 422 343

2-Mr. Wael Mohammed Musa Barakat Assistant General Manager 308 251

3- Mr. Nabil Mustafa Hussein Asaad Assistant General Manager 1,230 1,000

Spouse of Mr. Nabil Mustafa Hussein Asaad - 52

4- Mr. «Mohammed Majed» Allan Assistant General Manager 369 500

5- Mr. Omar Ribhi AlJabari Assistant General Manager 107 87

Spouse of Mr. Omar Ribhi AlJabari - 107 87

Sons of Mr. Omar Ribhi AlJabari - 83 68

6- Dr. Hussein Said «Amar Saifan» Assistant General Manager - -

7- Mr. Rohi Hassan Ashour Executive Director “A” - -

8- Dr. Hosni Abdel Aziz Hussein Jaradat Executive Director “B” -

9-Mr. Saadi Abdelrahman Qattawi Executive Director “B” - -

10-Mr. Baseem Musa Assi Executive Director “B” - -

11- Mr. Abdelkarim Ibrahim Mahmoud Wahbeh Executive Director “C” - -

12-Mr. Mahmoud Mohammed Mahmoud Jarwan Executive Director “C” 6,219 5,053

13- Mr. Ahmad Mustafa Mohammad Bahboh Executive Director “C” - -

14- Mr. Bashir Abde Rabo AlHaj Bashir Okasheh Executive Director “C” - -

15- Mr. Nai’m Mohammad Najem AlKhmousExecutive Director “C” - -

(c) There are no companies controlled by the Board members or senior management staff with executive authority and their relatives.

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18- (A) Following are the benefits and remunerations that the Chairman and Board members received as salaries, fees and remunerations…etc, and the amounts paid for each as travel and transportation expenses inside and outside Jordan during the fiscal year 2009:

Name

Board Membership

Remuneration (JD)

Board Committees Membership

Remuneration (JD)

Transportation Allowances

(JD)

Travel Expenses

(JD)

Allowances(JD)

AlBaraka Banking Group Co. represented by four members:

- - - - -

-Mr. Adnan Ahmad Yousif AbdelMalek 5,000 1,600 4,800 4,651 5,112

-Mr. Othman Ahmad Suleiman Ahmad 5,000 1,200 4,800 3,134 4,455

-Mr. Abdellatif Abdallah Abdelaziz AlRajhi 5,000 - 4,800 4,303 4,154

-Mr. Hamad Abdallah Ali Eqab 5,000 2,800 4,800 4,791 4,793

Mr. Musa Abdelaziz Mohammed Shihadeh 5,000 1,200 4,800 14,900 10,315

H.E. Eng. Raef Yousif Mahmoud Najm 5,000 3,200 4,800 - -

Mr. Salem Mohammed Salem Massaedah 5,000 2,000 4,800 - -

Mr. Kamal Sami Salman Asfour 5,000 2,000 4,800 - -

Mr. Haidar Issa Murad Murad 5,000 1,600 4,800 - -

Messers. Global Investment House Co. represented by*:

- - - - -

Mr. Talal Fawzi Mahmoud AlSamhouri 5,000 - 3,200** - -

Mr. Ayman Abdulkareem Hatahit 4,453 2,000 4,800 - -

* His Excellency Mr. Samer “Mohammad Emad” Aboushi, represented the company during the Board two meetings held on 30/9, 15/12, and received a total amount of JD (1600) as transportation allowances.

** Until 30/08/2009

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(B) Following are the benefits and remunerations that the senior management employees with executive authorities at the Bank received as wages, remunerations and salaries…etc, and the amounts paid for each as travel and transportation expenses inside and outside Jordan during the fiscal year 2009 in Jordanian dinars:

# Name Salaries RemunerationsTransportation

and Travel Expenses

Allowances Total

1Mr. Musa Abdelaziz Mohammed Shihadeh*

CEO & General Manager298,102 136,566 -

-434,668

2Mr. Saleh Musa AlShantir *Deputy General Manager

200,681 51,317 610 2,229 254,837

3Mr. Wael Mohammed Musa Barakat Assistant General Manager

84,830 13,016 - - 97,846

4Mr. Nabil Mostafa Hussein Asaad Assistant General Manager

84,830 13,016 - - 97,846

5Mr. «Mohammed Majed» Mahmoud Allan Assistant General Manager

74,019 11,280 2,415 2,230 89,944

6Mr. Omar Rebhi Jabari Assistant General Manager

92,130 22,177 - - 114,307

7Dr. Hussein Said «Amar Saifan» Assistant General Manager

68,535 21,100 3,685 6,709 100,029

8Mr. Rohi Hassan Ashour Executive Manger “A”

44,722 4,022 - - 48,744

9Dr. Hosni Abdelaziz Hussein Jaradat Executive Manager “B”

33,950 11,973 - - 45,923

10Mr. Saadi Abdel Rahman QattawiExecutive Manager “B”

43,196 4,511 - - 47,707

11Mr. Baseem Musa Assi Executive Manager “B”

35,232 3,561 1,935 1,516 42,244

12Mr. Abdelkarim Ibrahim Mahmoud Wahbeh Executive Manager “C”

31,678 3,012 - - 34,690

13Mr. Mahmoud Mohammed Mahmoud Jarwan Executive Manager “C”

10,591 850 - - 11,441

14Mr. Ahmad Mustafa Mohammad Bahbouh Executive Manager “C”

29,888 3,266 - - 33,154

15Mr. Bashir Abde Rabo AlHaj Bashir Okasheh Executive Manager “C”

31,403 3,602 - - 35,005

16Mr. Nai’m Mohammad Najem AlKhmous Executive Manager “C”

16,444 537 990 355 18,326

Total 1,180,231 303,806 9,635 13,039 1,506,711

* Each of them is using the Bank’s car.

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19- The Board’s report included a statement of donations and grants paid by the company during the fiscal year 2009.

20- Note No. (56) in the Bank’s consolidated financial statements shows the contracts, projects and agreements signed by the company with other subsidiaries, sister companies, associates, Chairman, Board members, General Manager, any employee in the company or their relatives.

21- The Company contributes to protecting the environment and the local community through its different activities.

We, the undersigned, hereby acknowledge the validity, accuracy and completeness of the information and data contained in the annual report of the Jordan Islamic Bank for the year 2009.

Financial Manager Vice ChairmanCEO, General Manager

Chairman

Abdelhamid Abu Saqri Musa Abdelaziz M. Shihadeh Adnan Ahmad Yousif AbdelMalek

The Board of Directors of the Jordan Islamic Bank hereby acknowledges:A. That there are no substantive issues that might adversely affect the Company’s sustainability during the

next fiscal year.B. Its responsibility for the preparation of financial statements and the provision of effective control system

in the Company.

AlBaraka Banking Group Co. Represented by H.E Mr. Adnan Ahmad Yousif Chairman

H.E. Mr. Musa Abdelaziz ShihadehVice Chairman

CEO, General Manager

H.E. Eng. Raef Yousif Mahmoud Najm Member

H.E. Mr. Salem Mohammed Salem Massaedh Member

H.E. Mr. Kamal Sami Asfour Member

AlBaraka Banking Group Co. Represented by H.E. Mr. Othman Ahmad Suleiman

Member

H.E. Mr. Haidar Issa Murad Murad Member

AlBaraka Banking Group Co. Represented by H.E. Mr. Hamad Abdallah Ali Eqab

Member

AlBaraka Banking Group Co. Represented by H.E. Mr. Abdellatif Abdallah AlRajhi

Member

Global Investment House Co. Represented by H.E. Mr. Ali Suhail Al Shanti

Member

H.E. Mr. Ayman AbdelKareem Hatahit Member

Acknowledgement

Acknowledgement

46


Annex 2“Disclosure Requirements in

Corporate Governance Guide of the Bank”

47

Annex 2“Disclosure Requirements in Corporate Governance Guide of the Bank”

1- Extent of compliance with the Corporate Governance Guide:

The Bank always endeavors to provide the best and highest Islamic Banking services and products, and seeks to innovate and develop new services that are compliant with the principles and teachings of the Islamic Sharia. As corporate governance provides the best rules, regulations and procedures which achieve and sustain trust in the Bank and its various activities, the Jordan Islamic Bank has decided to adopt the sound practices of corporate governance in consistence with the guidelines of corporate management controls issued by the Islamic Financial Services Board (IFSB), the instructions of the CBJ and the best international practices.

Accordingly, the Bank has prepared the Corporate Governance Guide to comply with its principles in terms of the Board of Directors, its committees, the responsibility of the executive management, control environment, internal control, transparency and disclosure as from December 31, 2007.

2- Board meetings and details of the Board committees:The Board held seven meetings during 2009.Details of the Board Committees are as follows:

Total

number of meetings during 2009

Duties & ResponsibilitiesDate of FormationNames of Members Description

2

Ensure the implementation of Corporate Governance Guide

Formed on 30th Oct. 2007 in response to the requirements of the Corporate Governance Guide effective as from 31st Dec. 2007

Adnan Ahmad AbdelmalekKamal Sami Salman AsfourHaidar Issa Murad Murad

Corporate Governance Committee

7

Ensure compliance with the financial and accounting related regulations

Previously formed in accordance with the Banks Law and the instructions of the Jordan Securities Commission

Raef Yousif Mahmoud NajmHamad Abdallah Ali EqabAyman Abdelkareem Bashir Hatahet

Audit Committee

5

Approve the Banking facilities and financing and investment agreements within the authorities delegated to it by the Board

It has been formed during the Bank early years of establishment

Adnan Ahmad AbdelmalekMusa ShihadehKamal Sami Asfour

Credit Facilities Committee

2Ensure that adequate remunerations policy is available


Haidar Issa Murad MuradAdnan Ahmad AbdelmalekRaef Yousif Mahmoud NajmSalem Mohammed Salem Massaadeh

Nominations and Remunerations Committee

3

Ensure that policies and strategies of risk management and compliance are available


Othman Ahmad SuleimanSalem Mohammed Salem MassaedahKamal Sami AsfourMusa Abdelaziz Mohammed ShihadehDr. Hussein Said “Amar Saifan”Abdel Hamid Abu SaqriDr. Musa Mubarak

Risk Management Committee

3- Risk Managementa-The Risk Management Department is directly supervised by the General Managerb-The Bank’s risks have been stated in Note No. (59) of the Bank’s closing statements of 2009.


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4- Transparency and Disclosure a-Annex 3 includes the full text of the Corporate Governance Guide.b-Annex 1 includes the required information of each Board member.c-Annex 1 also includes the Bank’s Organizational Structure.d-The Corporate Governance Guide includes the duties and responsibilities of Board Committees.e-Annex 1 includes remunerations of Board members and salaries of senior management employees.

5- Internal Control Systems:The Bank’s executive management acknowledges the following:

1- It is responsible for developing internal control systems for financial reporting at the Bank and maintaining such systems to ensure the quality and transparency of information and financial statements.

2- It has used the following framework to evaluate and review the internal control systems:- Understanding the main risks encountering the Bank and handling and mitigating them through the Risk

Management Department and special related committees (e.g. Risk Management Committee, Basel II Committee, developing and updating the regulations and procedures necessary to manage risks on a continuous basis).

- Preparing and developing strategies and policies, implementing the same after being approved by the Board of Directors and forming the required committees according to the Corporate Governance Guide.

- Preparing the Bank’s organizational structure, approving the same by the Board of Directors, ensuring actual compliance with the organizational structure, forming committees and delegating powers and authorities.

- Preparing the Corporate Governance Guide as per the instructions of the CBJ and approving the same by the Board of Directors.

- Preparing and approving the annual budget by the Board of Directors, and providing periodic performance reports to the Board of Directors showing the deviation between the actual and projected performance.

- Preparing a detailed job description including the tasks and responsibilities for each organizational unit. - Implementing dual control for each activity or operation. Segregating and identifying duties to avoid conflict of interests and reduce risks. - The Board and/or the Board committees shall have access to the reports of control authorities as well as

external and internal auditing, follow up violations and relevant comments and ensure that the Bank’s management remedies such violations and takes the necessary measures to guarantee non-repetition of such violations.

3- It has evaluated internal control systems and verified their effectiveness as of the end of 2009.4- All notes included in the disclosures are approved, complete, fair, balanced, understood and based on the

Bank’s published financial statements, and that the non disclosure of other statements or information might affect the results of the current and/or future operations and/or the financial position of the Bank, including potential effects and uncertainties.

49


Annex 3“The Full Text of the Corporate

Governance Guide for the Bank”

50

Annex 3“The Entire Text of the Corporate Governance Guide for Banks”

IntroductionThe importance of Corporate Governance in the Bank stems from the fact that it provides a basis to consolidate the trust in the Bank and its different activities and enable the contribution in developing the Jordanian Banking Service and the National Development.The Bank seeks to provide distinctive and matchless banking products and services, to undertake to develop and improve them, in addition to devising new services that are in tune with the principles of the Noble Islamic Sharia and fulfill the interests of the stakeholders. As a result, the Bank decided to adopt this CGG in a way that complies with the guidelines of the controls of establishments management which is restricted to the provision of Islamic financial services (except Islamic Insurance Companies and Islamic Investment Funds) issued by the Islamic Financial Services Board “IFSB” and the instructions of the CBJ in addition to the best international practices.

1- Guidelines1- Ensuring justice and fairness in the dealings with all relevant authorities, such as (shareholders, depositors,

Bank staff and controlling authorities.)2- Transparency and disclosure in a way that enables the relevant authorities to evaluate the bank’s position

and its financial performance.3- Accountability for relationships between the Executive Management of the bank, the BOD and shareholders

from one part and the other relevant authorities.4- Accountability in terms of clear determination of responsibilities and delegation of authorities.

2- Compliance with Corporate Governance1- Forming a committee emerging from the BOD called “Corporate Governance Committee”, comprised of

the chairman and two non-executive members to direct the process of preparing, updating and applying the Guide.

2- Integrating the annual report in a report for the public stating the extent of the bank’s management compliance with the clauses of the Guide and the application of each clause in addition to stating the reasons of non-compliance with any clause.

3- Board of Directors (BOD)1- General Principles

a- The BOD shall bear all responsibilities relevant to the bank’s operations and financial safety, in addition to meeting the requirements of the CBJ and the interests of shareholders, depositors, staff and other relevant parties, in addition to verifying that the management of the Bank is carried out effectively and under the applicable laws, directions and the internal policies of the bank.

b- The BOD shall outline the strategic goals of the Bank in addition to controlling its executive management which is responsible for carrying out daily operations. The BOD shall also approve the controls and internal monitoring and verify the extent of their efficacy and how the Bank complies with the strategic plan and approved policies and procedures or required under the laws and instructions issued for this concern as well as verifying that all risks of the Bank were managed properly and effectively.


51

2- Chairman and General Managera- The position of Chairman of the Board is separated from that of General Manager. In addition, there is no

family relationship up to the third degree between the Chairman and the General Manager. The division of responsibilities between the Chairman and the General Manager has been put down in writing, is subject to review and revision from time to time as necessary, and is approved by the Board.

b- Its prefer that the chairman shall not be executive. If he/she is executive, the Bank shall employ an independent member as vice chairman with a view to guaranteeing the provision of an independent source as a mouthpiece of shareholders. In all events, the status of the chairman shall be declared, executive or non-executive.

3- Chairman’s Rolea- Developing constructive relationships between the BOD and the executive management of the Bank and

between the executive and non-executive members.b- Creating a culture atmosphere the board meetings that shall encourage constructive criticism on the

issues of different point of views among members. Such culture shall encourage discussion and vote over such cases.

c- Verifying that all board members and shareholders get adequate information at the proper time.d- Verifying the availability of higher standards of CGG at the bank.

4- Composition of the Board1- The board shall include practical and vocational experience and professional skills. The board shall also

include executive members (employees at the bank), and non-executive members (not employees at the bank).

2- Among the non-executive members, there must be at least three independent members who have no relationship with the Bank but being board members.

3- Independent member is defined as the member, whether person or a natural legal person, who has no relationship with the Bank but being a member at the board of directors, which makes his view fair without being affected by other considerations or external affairs. The minimum limit of requirements of the independent member is as follows:a- The independent member should not have worked at the Bank during the three years prior to

nomination to the membership.b- The independent member shouldn’t have an employee who is a first or second degree relative at the

bank.c- The independent member should not receive a salary or any other amounts from the bank except his

remuneration as a member.d- The independent member shall not be a board member or an owner of a company dealing with the

Bank except transactions that arise due to services and/or regular work provided by the Bank to its clients provided that such transactions shall subject to the same terms and conditions of similar transactions with any other party and without privileged conditions.

e- The independent member shall not be a partner or an employee of the external auditor during the three years prior to his/her nomination for the board membership.

f- The independent member’s contribution shall not constitute an effective interest in the bank’s capital (controlling not less than 10%) or to be an ally of another shareholder.

5- Organization of the Board’s works:a- The Bank’s Board meetings take place at least six times a year. In order to ensure that a full range of

topics is considered, it is the practice of the Bank’s executive management to schedule a specific topic to be highlighted at each meeting

b- Board members shall be provided with adequate information sufficiently in advance of the board meetings to enable them to take the right decisions.

c- The responsibilities of the BOD members are determined and clear in line with the relevant legislations. When elected, all BOD members shall be given a booklet indicating his/her rights, responsibilities and duties.

d- All banking operations that require the BOD approval (for example, BOD’s authority regarding granting funds over a certain amount) shall be explained in writing.

e- The BOD members shall access constantly to the developments inside the Bank and local and international banking sectors. The Bank shall provide members with a proper summary of the business of the Bank at the time of appointment and during the membership period or upon request.f- The BOD members and its committees shall have a direct contact with the executive management.

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g- If necessary, the BOD member and committees may hire external sources to help them do the tasks assigned to them properly.

h- The BOD secretary shall record the discussions, suggestions and voting of the BOD. He/she shall verify that all members follow the procedures determined by the BOD, including transferring the information among BOD members, committees and the Executive Management in addition to determining the appointments of the BOD and filing meeting minutes. The BOD shall determine the job and tasks of the BOD secretary officially and in writing in accordance with the level of responsibilities provided hereinabove. It shall also pass any decision regarding the appointment or dismissal of the secretary by the BOD unanimously.

6- BOD Activities: (Appointment, Replacement, Self-Evaluation, Evaluation of the General Manager’s performance and Planning)

a- The BOD policy includes the appointment of a general manager who enjoys impartiality, honesty, technical qualification and banking experience.

b- The BOD’s approval shall be gained when some executive directors are employed such as the Chief Financial Officer (CFO) and the internal auditing officer and verifying that they do have the required experience.

c- The BOD shall ratify and approve succession plans for the executive directors of the Bank so that they should include the required qualifications and requirements of person to hold such occupations.

d- The overall performance of the BOD is evaluated at least once a year through the nomination and remunerations committee. The General Manager shall be evaluated annually by the BOD.

e- The BOD determines the goals of the Bank and directs the executive management to outline a strategy to achieve these objectives. The Executive Management shall develop work plans that commensurate with those strategies through the planning process that includes the contribution of all Bank departments. The BOD approves the strategy and work plans and verifies that the Executive Management reviews the performance achievements according to work plans and takes the remedial procedures where necessary. The process of preparing the estimated budgets is a part of the short term planning process and performance measurement.

f- The BOD shall verify that the Bank is performing its work with a high level of honesty and impartiality in doing its businesses. This can be done through the availability of policies and work ethics charter that includes the definition of conflict of interests and deals made by Bank staff for their own interest according to the internal information about the Bank gained/accessed as a result of the authorities provided for them. These policies and work ethics charter shall be generalized on all Bank staff and the BOD members and their approval shall be gained and published to the public. The above policies shall include the following:1- Rules and procedures that organize the operations with relevant parties whether between the Bank

and its staff or the BOD members or their companies, or relevant parties, including the operations of financing and joint investment with the bank. Those rules shall include evidence that credit was given to the BOD members and their companies pursuant to the prevailing prices at the market, not on privileged conditions. The member shall not participate in any meeting where those issues are treated, contracted or voted. It shall also be disclosed in the bank’s annual report. The Bank departments concerned with controls and internal control shall verify that the operations of relevant parties was made in line with this policy.

2- Clear controls that prevent the BOD members and staff from making use of internal information of the Bank for their own interest.

g- The Bank should have written policies that cover all its banking activities. Such policies shall be generalized at the administrative levels. Furthermore, it shall be reviewed regularly to verify their inclusiveness of any amendments or changes introduced to laws, instructions, economic conditions and any other affairs relative to the bank.

h- As a part of the approval process, the Bank shall grant the credit by evaluating the quality of Corporate Governance for its clients from companies, especially public joint stock companies, so that risk evaluation for clients is made in weak and strength points to practice them in the field of corporate governance. The Bank may remunerate the clients who have good governance in their companies.

7- BOD Tasks and Responsibilitiesa- Appointment of the General Manager determining his\her authorities and responsibilities, and terminating

his services.b- Practicing the authorities not delegated to the GM.

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c- Understanding the main risks facing the Bank and approving acceptable limits of such risks and supervising the Executive Management at the Bank to guarantee that necessary procedures are taken to determine, measure and control such risks.

d- Approving the organizational structure of the Bank and forming BOD committees and delegating powers and authorities.

e- Approving the strategies, policies, annual budget, work ethics charter and reviewing them regularly.f- Reading the reports of the monitoring authorities and external and internal auditing in addition to following

up the violations and notes provided therein along with verifying that the Executive Management remedies such violations and take the necessary procedures to guarantee that they will not be repeated, in addition to any other reports related to compliance, risk management and all relevant matters.

g- Adopting the annual, semi-annual and quarterly financial statements after being approved by the auditors and disclosed to the relevant authorities.

h- Evaluating the performance of Executive Management and the extent of compliance with BOD’s policies and its success in achieving the planned results and goals and remedying deviations.

i- Adopting the general bases of work and issuing the internal regulations relevant to the organization and management of the Bank and personnel affairs. Such bases include the right of contracting with efficient experts and consultants and others to work at the bank, in addition to drawing up the regulations of appointments, promotions, raises, bonuses and all financial and administrative affairs for good governance of the bank.

j- Adopting the internal regulations regarding the organization of work, provisions of accepting investment deposits, issuing Al Muqarada bonds, the method of calculating the share in profits, organization of the management of joint funds and monies allocated for certain purposes.

k- Drawing up the general applicable policy occasionally, in the fields of diversification, available financial resources, determining the ways of their investment, ordering risks distribution and acceptable guarantees from the point of view of Sharia.

l- Approving service fees, commissions and wages that the Bank can charge for banking transactions and the management work in its different activities.

m- Approving the settlements and reconciliations and accepting arbitration which the Bank management agrees to enter thereof.

n- Approving the annual work plan developed for opening new branches, expanding in different investment fields and devising new methods to develop the banking work that is not based on usury (interest).

o- Appointing a BOD member or more to have the right of signing on behalf of the Bank solely and jointly, according to what the BOD decides in this regard.

p- Appointing the signatories on behalf of the Bank from its staff, permitting granting authorities of signing for employees at the Head Office and branches according to the needs and requirements of work.

4-Board Committees1- To increase its efficacy, the BOD shall form the following standing committees in addition to the “Corporate

Governance” committees:a- Audit Committee b- Nominations and Remunerations Committeec- Risk Management Committee d- Executive Committee

2- The BOD may form committees to perform certain tasks and for a definite period of time. Some authorities and responsibilities are delegated by the BOD to those committees.

3- By virtue of the approval of the BOD, the committees may develop written work procedures that organize their work and determine their obligations provided that such procedures shall be put in writing in the (charter).

4- Committees present their reports and recommendations to the BOD and the names of their members are disclosed in addition to a summary of their tasks and responsibilities in the annual report of the bank.

5- The principle of transparency shall be applied when appointing members of BOD committees.6- Committees meet as per what is provided in its formation system or whenever required.7- Committees are comprised of non-executive BOD members (and they may include executive BOD members

provided that it doesn’t conflict with the applicable legislations), and the number of committee members shall not be less than three, and the decisions and recommendations of such committees are taken by the great majority.

54

8- Committees shall have the following authorities:a- Requesting any information from the Executive Management and from Bank staff who must cooperate

to provide such information in a complete and accurate way.b- Requesting legal, financial, administrative or technical consultation from any external consultant.c- Requesting the attendance of any employee at the Bank to get more explanations.

a- Corporate Governance Committee1- This committee is comprised of the BOD Chairman and the two non-executive members to direct the

process of preparing, updating and applying Corporate Governance Guide. 2- The committee shall verify the application of the CGG in terms of BOD, board committees, the responsibility

of the Executive Management, Sharia Supervisory Board, Controlling environment and internal control, external auditing, relationship with shareholders, equities of investment accountholders, transparency and disclosure.

b- Audit Committee1- At least two members of the Audit Committee shall be holders of specific educational certificates and/

or practical experience in the fields of financial management. The independent members shall be two members at least.

2- Names of the committee members are disclosed in the annual report of the bank.3- The committee exercises its tasks and responsibilities under the banks Law and any/all other relevant

legislations. Tasks and responsibilities of the AC includes: -a- Scope, results and extent of sufficiency of internal and external auditing of the bank.b- Accounting issues which have a substantial impact on financial statements.c- Internal Controls at the bankd- Discussing all aspects relevant to the function of the external auditor including his/her notes, suggestions

and reservations in addition to following up the extent of the bank’s response to such notes, suggestions and reservations and providing recommendations to the BOD.

e- Reviewing correspondences with the external auditors, evaluating their contents and expressing notes and recommendations to the BOD thereon.

f- Following compliance with the securities law and the regulations, instructions and decisions issued according to it.

g- Studying periodic reports before being submitted to the BOD and making recommendations there to focusing on the following:1- Any change in the adopted accounting policies.2- Any change that may be introduced to accounts due to auditing processes or as a result of suggestions

of the external auditor.3- Studying the work plan of the external auditor and verifying that the Bank provides the auditor with

the required facilities to do his/her work properly. 4- Approving the internal auditing plan and evaluating the procedures of internal auditing and reading

the internal auditing reports, especially the reports of any violations that may arise as a result of the work of internal auditor.

5- Making suitable recommendations for the BOD regarding the matters related to the internal auditing procedures and work of internal auditor.

6- Verifying that there is no conflict in interests that may result from deals or contracts signed by the Bank or entering into projects with relevant parties.

7- Reviewing the dealings of relevant parties with the Bank before being approved. 8- All other affairs decided by the BOD.

h- The committee shall provide the BOD with recommendations regarding the appointment, dismissal and remuneration of the auditor and any other contractual terms or conditions related to him/her. In addition to evaluating the objectivity of the external auditor, taking into consideration all other work made outside the scope of auditing with a view to guaranteeing this objectivity.

i- The committee is entitled to gain any information from the Executive Management in addition to its right to calling upon any executive or BOD member to attend its meeting.

j- The committee meets the external auditor, internal auditor and compliance officer at least once a year without the attendance of the Executive Management.

55

c- Nominations and Remunerations Committee1- The committee is comprised of at least three non-executive members, provided that most of them,

including the committee Head, shall be from independent members.2- The committee shall name the BOD members taking into consideration the abilities, qualifications of

the nominated people. In case of re-nomination, the number of times they attended and the quality and effectiveness of their participation in the board meetings are considered.

3- The committee shall determine whether the member is an independent member or not, taking into account the minimum limit of requirements deemed to be necessary in the independent member.

4- The committee adopts certain and approved bases in evaluating the effectiveness of the BOD so that performance evaluation standard shall be objective and includes comparison with other banks and similar financial institutions, in addition to the standards of safety and correctness of financial statements of the Bank and the extent of compliance with the control requirements.

5- The committee shall be responsible for providing the BOD, upon request, with information and summaries of the background of some important issues about the bank. It shall be kept responsible for updating them with most recent issues relevant to the banking work. To achieve this, the Bank encourages its BOD member to attend the seminars which allows them to meet with local and international institutions and companies.

6- The company shall review the remunerations paid to the Executive Management and shall recommend remunerations (including the monthly salary and other benefits of the GM). The committee is also responsible for reviewing remunerations (including salaries) paid to the rest of the Executive Management.

7- The company shall be responsible for verifying that there is a remunerations policy at the Bank which indicates that remunerations and salaries are high enough to attract qualified people to work at the Bank and maintain them, putting into account that salaries paid by the Bank shall be in line with those paid by similar banks in the market.

8- The summary of remunerations policy at the Bank shall be disclosed in the annual report of the bank. Remunerations of BOD members shall be determined on an individual basis and the highest salaries paid to non-BOD executive directors over the year.

d- Risk Management Committee1- The committee is responsible for reviewing and evaluating the policies and strategies of risk management

at the Bank before being approved by the bank, especially; a- Cash liquidityb-Investment and financec-Credit risks including financial positionsd-Reservese-Sufficiency of insurance policies to cover risksf-Sufficiency of organizational and economic capital of the bankg-Operation risks at all work centers and Bank departmentsh-Reviewing and evaluating the methods and approaches of measuring the risks employed at the

bank.i-The limits of exposure to risks at the levels of the country, currency, time limits, counter party, tool,

market and sector.j- New products and services before release.k- Reviewing the structure of the risks department and the process of developing it before submission

to the BOD.l- Keeping pace with developments and growing complications introduced to risks management inside

the Bank and submitting periodic reports to the BOD regarding such developments.2- The committee is specialized in the field of compliance and fighting money laundering and terrorism

financing by means of reviewing and evaluating relevant policies and procedures before being approved by the BOD, especially;a- Compliance work guidelines, by means of applying the clauses of laws, instructions and systems of

Bank business which relate to fighting money laundering and terrorism financing. b- Monitoring and controlling compliance, fighting money laundering and terrorism financing and

suggesting suitable amendments.c- Know Your Customer forms (KYC), forms of opening accounts, forms of similar internal and

56

external movements and other relevant forms.d- Controlling measures of operational processes in protecting and supporting the Bank against the

possibility of using its operational processes by money laundering gangs and terrorism financing.e- Verifying that the training of money laundering and terrorism financing already exists in accordance

with the new laws and regulations, to deter modern methods used in this field. f- Exclusion of well-known clients from the report of big monetary operations over the limited ceiling

and determining and amending the exception ceiling according to the development of client’s status.

g- The extent of staff compliance with the application of policies, procedures and regulations of compliance and combating money laundering.

h- Accounts reports, withdrawals and deposits, transfers, other activities relevant to the accounts which is considered to be relatively dangerous and how such operations are suitable to the economic activities.

e- Executive CommitteeThis committee shall be responsible for approving the banking facilities and financing and investment

agreements as a part of the authorities delegated to the committee by the BOD.

5- Responsibility of the Executive Management1-Preparing and developing strategies and policies and working on their application after being approved by

the BOD.2-Preparing and developing work procedures so as to guarantee the determination, measurement, controlling

and monitoring risks facing the Bank and applying such procedures.3-Preparing financial statements and final accounts and submitting them to the BOD for approval.4-Preparing the organizational structure and abiding by it before being approved by the BOD.5-Preparing and approving the annual budgeting in addition to providing regular administrative reports to the

BOD showing the deviation between the actual performance and the planned one.6- Developing proper internal controlling policies and applying them after being approved by the BOD.7- Carrying out responsibilities according to the delegated authorities.8- Achieving the effectiveness of controls and internal monitoring and submitting at least one annual report to

the BOD about the application and effectiveness of systems.9- Setting the procedures that guarantee the organization of capital adequacy and submitting regular reports

to the BOD in this regard.10-Providing external and internal monitoring authorities such as the monitoring authorities, internal auditing,

external auditing and all other relevant authorities or organizations, and at the definite time, with the information and statements deemed necessary for performing their tasks properly.

11-The annual report shall indicate that the Executive Management is responsible for providing internal controls to ensure the quality and transparency of the required information and financial statements.

13-Formulating the Work Ethics Charter of the Bank and approving it by the BOD then generalized at the administrative levels at the bank.

13-Developing skills and professional conduct of the Bank’s staff to correspond with the latest developments and techniques.

6- Sharia Supervisory Board (SSB)1- According to its Articles of Association, the Bank complies with the teachings of Islamic Sharia. To implement

the provisions of Banks Law, the Bank shall appoint, by virtue of a decision from the Shareholders General Assembly, a board called “Sharia Supervisory Board” and the number of its members shall not be less than three people and its opinion shall be binding for the Islamic bank. The SSB shall undertake the following tasks:

a- Monitoring businesses and activities of the Bank in terms of compliance with the teachings of Islamic Sharia.

b- Showing the Sharia opinion in the contract forms for the activities and businesses of the bank.c-Considering all affairs that needs the Sharia opinion pursuant to the instructions of the CBJ issued for this

purpose.d-Showing the Sharia opinion for the BOD and the GM regarding Bank transactions.e-Issuing an annual report for the Shareholders General Assembly.

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2- The SSB shall appoint one of its members as its head. The SSB shall meet twice a year at least and whenever necessary by a call from its head or according to a decree from the BOD or according to the request of two members, or upon the request of the GM. The quorum of the meeting is at least two members if the number of its members is three. The quorum shall be considered by the attendance of the majority of members if the number of its members is more than three. In all events, all decision shall be taken by the consensus or the majority.

3- A secretary shall be employed at the SSB to record the minutes and follow the sessions, inquiries and answers by the SSB.

4- The Bank should publish the fatwas (advisory opinion) of the SSB to make people aware of.

7-Control Environment and Internal Monitoring 1- Control systems and Internal Monitoring:

a- The Bank’s structure of internal monitoring is reviewed at least once a year by internal and external auditors.

b- The Board provides a statement in the Annual Report on the adequacy of the Bank’s internal monitoring over its financial reporting. This statement contains: -

1- a statement of Executive Management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the Bank;

2- a statement identifying the framework used by Executive Management to evaluate the effectiveness of internal control;

3- Executive Management’s assessment of the effectiveness of internal control as of the date of the financial statements included in the Annual Report of the bank;a-a report by the Bank’s external auditor on the Executive Management’s assessment and the effectiveness

of internal controls;b-Disclosure of any substantial weaknesses in the internal.c-The Bank has set up arrangements whereby staff can confidentially raise concerns about possible

irregularities, and that allow for such concerns to be independently investigated and followed up. Such arrangements are overseen and monitored by the Audit Committee.

2- Internal and Sharia Audit 1-The Bank shall provide the Internal and Sharia Audit with the adequate number of highly qualified

cadres so that they can be trained and remunerated properly.2-The Internal and Sharia department shall have the right to obtain any information and contact any

employee at the bank. It shall also be given adequate standing and authority within the Bank to adequately carry out its task

3-The Internal and Sharia department follows the Audit Committee that emerge from the BOD and shall report its achievements to this committee directly. Internal Audit shall be responsible for suggesting the structure and scope of Internal Audit and informing the Audit Committee of the possibility of any conflict in interests.

4-The tasks and responsibilities of the Internal Audit department are as follows:a- Ensuring the adequacy of control systems and internal monitoring as well as risks management

systems and the extent of their effectiveness.b- ensuring that Bank business is in conformity with the teachings and principles of the noble Islamic

Shari’a.c- Assisting the BOD in carrying out its responsibilities adequately by providing it with analyses,

assessment processes and recommendations regarding the activities reviewed by the Internal Audit department.

d- Ensuring the execution of the instructions of the controlling authorities and BOD decisions. e-Verifying the execution of the decrees and recommendations of the SSB regarding compliance with

the Sharia aspects of transactions.f-The functions, powers and responsibilities of Internal and Sharia Audit are documented within the

Internal Audit Charter which is approved by the Board.g-Internal and Sharia audit staff shall not be assigned to do any executive responsibilities/works.h-Reviewing the work of organizational units at the Head Office and branches, preparing reports

regarding the notes discovered and certain procedures required remedying such notes and irregularities. Reports shall be prepared without any external interference. Internal and Sharia department is entitled to discuss its reports with the departments and branches under auditing.

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i-Reviewing financial reporting at the Bank to ensure that basic information on administrative and financial affairs are accurate, reliable and timely.

j-compliance with internal policies, international standards, procedures, and applicable laws and regulations;

k- Ensuring the enforcement of Bank instructions and its internal systems and suggesting how to remedy weak points in financial, managerial and technical systems.

I- Auditing the accounts of companies affiliated to the bank.m-Other works relevant to the business of the department shall be assigned by the Audit Committee.

3- Risk Management Departmenta- Objectives:

Managing the different risks that the Bank may be vulnerable to such as the risks of market, operation, credit, hard currency, liquidity, and rate of return with a view to getting higher profitability rates at an acceptable level of risk for various activities.

b- The tasks and responsibilities of the Risks Management department are as follows:1.Managing market risks, operational risks, credit risks, hard currency risks, rate of return risks in

addition to using the most modern scientific methods for measuring such risks. 2.Analyzing and evaluating the risks of new activities, products and services before launching them.

The same applied for existing activities, products and services.3.The development of methodologies for the measurement and control of each risk4.Recommending limits to Risk Management Committee, and the approval, reporting and recording of

exceptions to the policy of risk management, if any.5.The provision of information on risk metrics and on the Bank’s risk profile to the Board and the

Senior Executive management.6.The committees within the Bank shall help the Risk Management Department in doing its tasks and

responsibilities.7.The provision of risk information for use in the Bank’s public statements and reporting.8.The annual report of the Bank shall include information about risk management regarding its structure

and the nature of its operations and developments.4- Compliance Department

a- Objectives:1- Compliance department aims at ensuring that the Bank and its internal policies comply with all laws,

regulations, instructions, codes of conduct, standards, sound banking practices issued from local and international controlling authorities which determine, assess and provide advice and guidance and monitor and submit reports to the BOD regarding the extent of the bank’s compliance.

2- Compliance risks are represented in legal or controlling penalties, material losses or reputation risks that the bank might encounter Bank due to incompliance with laws, rules, regulations, code of conduct, standards and sound banking practices.

b- The tasks and responsibilities of the Compliance Department are as follows:1.Helping the Executive Management and Bank staff manage the compliance risks facing the bank.2.Providing advice for the Executive Management regarding the applicable laws, rules and standards and

any subsequent amendments.3.Making staff aware of compliance issues and preparing written instructions in this regard before

developing the compliance guide in line with the size, nature and complexity of the Bank’s operations and its internal organization, practical practices guidelines and professional conduct charter.

4.Preparing an effective methodology to ensure that the Bank complies with all applicable laws and legislations and all relevant guides.

5.Preparing and developing compliance policy and ensuring that the Bank applies it adequately.6.Reporting the results of compliance activities to the BOD or the committee emerging from the BOD, in

addition to sending a copy of such results to the Executive Management.

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8-External AuditingIn compliance with the provisions of banks law and any other relevant provisions provided in other legislations, the Bank abides by the following:a- Signing an agreement with the external auditor to audit the work of the Bank so as to include doing all

matters that fall on his/her burden which are consistent with the requirements of international auditing standards. According to the agreement, the external auditor shall do the following tasks;1- Providing the BOD with a detailed report including all weakness as in the internal audit and accounting

systems and any other matters with negative impacts he learns about during the auditing process.2- Ensuring the correctness of the data provided to him during the process of auditing.3- providing the CBJ with copies of the reports submitted to the Bank within the framework of the auditing

task he appointed for.b- Ensuring that the following terms apply to the external auditor:

1- A holder of a valid profession exercise license2- A member at the Jordanian Chartered Accountants Association.3- Practiced this profession as full time for three consecutive years after gaining the license of practicing

the auditing profession. 4- He should have one auditor or more working at his office who meets the above conditions.

c- Gaining the approval of the Audit Committee before agreeing with the external auditor to provide any other information out of the scope of the auditing task, in line with the law of practicing the applicable auditing profession and the rules provided that such services shall be disclosed.

d- Rotating the external audit job between auditing firms. Should this no longer be practical, then the Bank will at a minimum require the regular rotation of the principal partner in charge of the external audit.

e- The proper procedures shall be taken to ensure that:1- The external auditor shall not be a founder, shareholder or member at the Bank BOD or a partner or

employee working for any BOD member.2- The external auditor shall refrain from doing any additional tasks for the benefit of the Bank such as

providing administrative and technical consultations unless the approval of the Audit Committee is gained.

3- The external auditor shall enjoy independency pursuant to the international audit standards.4- The external auditor shall do his work neutrally and the BOD or the Executive Management shall not

interfere in his work.f- No employee of the external audit firm shall be employed at the Bank unless at least two years have expired since he left the audit firm.g- The external auditors meet the Audit Committee, without the Executive Management presence, at least once per year.

9- Relationships with ShareholdersWithout prejudice to the applicable legislations, the Bank shall take the necessary procedures to ensure that shareholders get their rights without distinction. These procedures include:1- The Bank takes active steps to encourage shareholders, in particular minority shareholders, to participate

in the Annual General Assembly, and also to vote either in person or in their absence by proxy. Voting for each case discussed in the meeting shall be on an individual basis, taking into account that the Shareholders General Assembly enjoys the following authorities:a:Electing the BOD members and the external auditor.b:Appointment of an independent Shari’a Supervisory Board (SSB)c:Discussing the BOD report on the performance of the Bank and its plan for the upcoming period.d:Amendment of the Articles of Association of the Bank especially regarding changing the main objectives

and goals of the bank.e:All affairs relevant to the merger or winding up of the bank.f:Removing the BOD, chairman or any of its members.g:Selling the Bank or acquisition of another bank.h:Increasing or reducing the capital of the banki:Selling all assets of the Bank or part whereof may affect achieving the goals and objectives of the bank.J:Approving the annual financial statements.k:Bank staff should own shares in its capitall:The Bank may purchase and sell its own shares.

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2- The Bank’s policy is that the Chairmen of all Board Committees should be present at the Annual General Assembly. The external auditors shall be called upon to attend the AGA with a view to answering any questions posed regarding the auditing and auditor’s report.

3- The call of the Chairman or a member of the Sharia Supervisory Board to attend the Annual General Assembly to read the annual report of the SSB and answer any questions or inquiries that may be posed regarding the Sharia affairs.

4- Notes, minutes, and a report of the proceedings of the Annual General Assembly, including the results of voting, and the questions from shareholders and Executive Management’s responses, are prepared and made available to shareholders after the Annual General Assembly.

10- Investment Accountholders> Rights1- The Bank shall maintain the rights of investment accountholders, whether such accounts were for restricted or

unrestricted investment.2- Generally, keeping the rights of investment accountholders can be achieved if the Bank complies with the

following: a: Adopting the rights of investment accountholders in following up the performance of their investments and

the relevant risks in addition to setting the adequate methods to ensure keeping and practicing these rights, in terms of:- Grating investment account holders equal to the necessary information regarding their investment

accounts with shareholders.- Making investment accountholders aware of the bank’s policies and practices regarding investment

accounts. - The right of investment accountholders to follow up their investments shall not be considered as interfering

in the bank’s management of such investments.- Prior to opening the investment accounts, the Bank shall give the accountholders adequate information

about their contractual rights, risks associated with the products of investments accounts, including basic investments and strategies of distributing assets and the adopted method of calculating profits/losses of investments.

- The Bank shall be responsible for losses resulting from violation, default or negligence in the application of the investment contract.

b: Approving a sound investment strategy which is consistent with the expected risks and revenues of investment accountholders (taking into consideration the distinction between the accountholders of restricted and unrestricted investments), in addition to adopting transparency in supporting revenues.- Revenues (distributed profits) shall be supported for the investment accountholders and shareholders

through using profits rate reserve deducted from the investment profits prior to deducting the bank’s share as a speculator.

- Profits rate reserve is not meant to cover existing loss or convert loss into profit.c: Contracts concluded with the accountholders or the conditions of opening the accounts signed by them.d: Teachings of Islamic Shari’a and the opinion of the SSB.e: Banks law and other applicable legislations.f: Articles of Association of the bankg: Accounting standards, audit and controls of the Islamic Financial Institutions h: Corporate Governance Guide and its controlling, monitoring and auditing systems.i: Work systems as set by the bank.

3- In particular, maintaining the rights of unrestricted investment accountholders can be achieved through the bank’s compliance with article (3) of clause (16) of the Articles of Association of the bank, which stipulates the following; a: The Board shall decide by means of public advertising the general percentage of profits of total joint

investment money at the beginning of the fiscal year provided that such advertisement shall not be delayed beyond the end of the first month of every year.

b: The Bank shall keep an account in the fund of investment risks at the joint investment accounts to cover any losses that exceed the total investment profits in a certain year. This fund is replenished as follows:1- Deducting 10% at least of the net investment profits of various existing operations throughout the year.2- The above percentage can be increased by virtue of an order from the CBJ so that the amended percentage

is increased in the fiscal year following the amendment.3- Deduction shall stop when the congregated amount in the fund becomes as double as the paid up capital

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or any other amount determined by the CBJ.c: In its capacity as a joint speculator, the Bank receives the declared portion of the speculator. The Bank is

also entitled to share the joint investment profits according to the percentage of its own resources or money permitted to be used for losses or profits.

d: In its capacity as a joint speculator, the Bank bears the losses resulting from the violation or negligence of the BOD members, directors and/or the Bank’s staff. Negligence which the Bank is accountable for includes manipulation, faithlessness and connivance with third parties, in addition to all other types where honest and faithful work is not complied with.

e: Subject to the provisions of law, the appointed SSB shall ensure the existence of Fiqhi proof that supports the Bank is to bear any loss within the scope of joint investment operations.

11- Transparency and DisclosureThe Bank is required to disclose in accordance with the International Financial Reporting Standards (IFRS), accounting and auditing standards, controls of Islamic Financial Institutions and applicable instructions of the Central Bank of Jordan issued by the banks law and other relevant legislations.The Bank recognizes its obligation to provide meaningful information on its activities to the CBJ, shareholders, depositors and other banks in addition to concentrating on the issues that arise the concerns of shareholders. The Bank discloses such information on a timely basis, and makes it available to all.In its annual report, the Bank explains its responsibility for the accuracy and adequacy of financial statements and the information provided in its annual report.The Bank commits to maintaining the following communication channels with the monitoring authorities, its shareholders, depositors, other banks, and the public in general, through the following:a: Professionally-staffed investor relations function that provides comprehensive, objective, and up-to-date

information on the Bank, its financial position and performance, and its activities;b: The Annual Report, produced after the end of the fiscal year;c: Quarterly reports, providing quarterly financial information and the Board’s report on the Bank’s stocks

trading and financial position during the year;d: Regular meetings between the Executive Management of the Bank and investors and shareholders;e: Regular briefings by the senior management of the Bank, especially the General Manager and the Chief

Financial Officer, for shareholders, financial market analysts, and financial journalists; andf: Information provided through the Bank’s Annual Report, or its quarterly reports, and the text of any public

presentations given by executives, is made available to interested parties through the Bank’s investor relations function, and in a timely manner on the Bank’s website, in both Arabic and English.

In its Annual Reports and quarterly reports, the Bank’s Executive Management includes ‘Management Discussion and Analysis’ (MD&A) disclosure that allows investors to understand current and future operating results and the financial condition of the Bank, including the possible impacts of known trends and events and uncertainties. The Bank commits to ensuring that such commentary is reliable, complete, fair and balanced, and understandable, and is grounded in the Bank’s financial statements as reported. As part of its commitment to transparency and full disclosure, the Bank in its Annual Report includes the following information: -

a: Its Corporate Governance Code, and annual details of its compliance;b: Information on each individual member of BOD: qualifications and experience; shareholding in the Bank;

whether an independent, non-executive, or executive Director; the membership of Board Committees; dates of appointment to the Board; other directorships; attendance at Board and Board Committee meetings; remuneration; loans from the Bank and other transactions between the Bank and the Director or his companies or other related parties.

c: Summary of the organizational structure of the bank;d: Summaries of the terms of reference of Board Committees, and any authorities delegated by the Board to

Board Committees;e: The frequency of Board and Board Committee meetings;f: Summary of the remuneration policy; remuneration of highest-paid executive management;g: Statement by the Board of the adequacy of internal monitoring;h: A description of the structure and activities of the Risk Management Department; andi: The significant shareholders of the Bank (for example, individual or related parties holding or controlling

more than 10% of the Bank’s capital), with identification of the main shareholders in companies deemed to be a principal shareholder at the bank, if necessary.

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Annex 4The Guidelines of Corporate Governance Guide for Public

Shareholding Companies Listed in Amman Stock Exchange

63

Annex 4

The Guidelines of “Corporate Governance Guide” for Public Shareholding Companies Listed in Amman Stock Exchange

Our Bank has prepared the “Corporate Governance Guide” based on the CBJ instructions and in consistence with the “Guidelines of management controls for institutions offering Islamic financial services” issued by the Islamic Financial Services Board/Malaysia. According to this guide which has been approved by the Board of Directors, our Bank applies the rules stated in the “Corporate Governance Guide” that includes most of the Guidelines of the Corporate Governance Guide for Public Shareholding Companies listed in Amman Stock Exchange”, and as stated in the Report’s pages and annexes.


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All Praise be to Allah, Lord of the Worlds,And Prayers and Peace be upon MohammedAnd his kins and followers.

To Messrs/ Shareholders of the Jordan Islamic Bank,Assalmu Alikum Wa Rahmtu Allah Wa Baraktu,

Pursuant to the Jordanian Banks Law No. 28 of 2000 and its provisions related to Islamic banks, and in accordance with the Bank’s Articles of Association, the Board presents the following report: The Sharia Supervisory Board monitored the principles used and the contracts related to the transactions and the applications launched by the Bank during the fiscal year ended on 31 December 2009. It also conducted the required monitoring to express an opinion on whether the Bank has complied with the Sharia rules and Fatwas, decisions, and the specific guidelines we issued, and to ensure the Bank’s compliance with them. The Bank’s management holds the responsibility of implementing its transactions according to the rules of the Islamic Sharia, whereas our responsibility is limited to expressing an independent opinion based on our monitoring of the Bank’s transactions and issuing a report to you. Our monitoring comprised examining the documentation and the procedures followed by the Bank on the basis of testing each type of transactions through the Internal and Sharia Audit Department. We have planned and implemented our monitoring in order to obtain all the information and interpretations that we deemed necessary to provide us with sufficient evidences to give reasonable assurance that the Bank did not violate Sharia rules and principles.

Our Opinion:A: The contracts, operations and transactions concluded by the Bank during the year ended on 31 December

2009, which we reviewed, were conducted according to the Sharia rules and principles.B: The profits distribution and loss allocation to the investment accounts complies with the principle we adopted

according to the Sharia rules and principles.C: All amounts devolved to the Bank from sources or by means that do not comply with the Sharia rules and

principles were not incorporated in the Bank’s revenues and are spent for charitable purposes.D: The responsibility of paying Zakat falls on the shareholders. The Bank’s management is not authorized to

pay Zakat directly, as there is no law to that effect, and the Bank’s Articles of Association do not stipulate such an action nor do the decisions of the General Assembly or the shareholders’ authorization. Therefore, the shareholder shall pay the Zakat of his shares when the Sharia conditions and controls of Zakat apply, while considering the following:

If the intention upon purchasing shares or subscribing for shares is trading, then he should pay the Zakat of the market value of shares and dividends.If the intention upon purchasing shares or subscribing for shares is collecting profits and nottrading, then he should pay the Zakat of the dividends in addition to the Zakat assets of his shares in the Bank through inspection and assessment.

Thanks be to Allah, the Lord of the Worlds

Date: 22 Safar 1431 HCorresponding to: 7th February 2010

Chairman Vice Chairman

H.E. Dr. Ibrahim Zaid AlKilani H.E. Dr. AbdelSattar Abu Ghuddeh

Member Member

H.E. Dr. Abdelaziz AlKhayat H.E. Dr. Mahmoud AlSartawi

Annual Report of Sharia Supervisory Board for the Fiscal Year ended on 31 December 2009

Jordan Islamic BankPublic Shareholding Limited Company

The Consolidated Financial Statements

For the Year Ended December 31, 2009

66

Independent Auditors Report to the Shareholders of

Jordan Islamic BankAmman- The Hashemite Kingdom of Jordan

We have audited the accompanying consolidated financial statements of the Jordan Islamic Bank (Jordanian Public Shareholding Company), which consists of the consolidated statement of financial position as at 31 December 2009, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of the changes in equity, the consolidated statement of cash flows, the consolidated statement of the sources and uses of good loans fund for the year then ended and a summary of the most important accounting policies and other explanatory notes.

Responsibility of the Management for the Financial Statements:The Board of Directors is responsible for the preparation and fair presentation of these financial statements in compliance with the rules and principles of the Islamic Sharia as determined by the Sharia Supervisory Board of the Bank and in accordance with the standards of the (AAOIFI). This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and presentation of the financial statements that are free of material misstatements whether due to fraud or error, as well as selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditors` Responsibility:Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Auditing Standards of the Islamic Financial Institutions, which require that we plan and perform the auditing procedures to obtain a reasonable assurance that the consolidated financial statements are free from any material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor`s judgment including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the Bank`s internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for the circumstances, but not for expressing an opinion on the effectiveness of the Bank`s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as assessing the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Our Opinion:In our opinion, the consolidated financial statements mentioned above fairly show, in all material respects, the financial position of the Jordan Islamic Bank as of 31 December 2009, and its consolidated financial performance, consolidated cash flows and the consolidated statement of the sources and uses of good loans fund for the year then ended in accordance with the rules and principles of the Islamic Sharia as determined by the Sharia Supervisory Board, and in compliance with the Standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

Report on the Legal Requirements:The Bank keeps accounting records and entries duly organized, and the consolidated financial statements included in the Board’s report comply therewith and we recommend approving the same.

Ernst and Young - Jordan

Waddah Essam BarqawiLicense No. 591

Ibrahim Al-Abbassi & Co.

Dr. Ibrahim AbbasiLicense No. 116

Amman- The Hashemite Kingdom of Jordan11 February 2010

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Consolidated Statement of Financial Position As of December 31, 2009

Assets Notes

2009 2008

JD JD

Cash and balances at Central Banks 4 771,251,223 577,031,989

Balances at Banks and Banking Institutions 5 101,622,408 103,138,295

Investment Accounts at Banks and Banking

Institutions6 4,608,500 9,320,403

Deferred Sale and Other Receivables –Net 7 913,106,321 806,222,472

Finances –Net 7A 14,969,954 14,340,315

Financial Assets Available for Sale 8 98,459,139 93,079,158

Financial Assets Held to Maturity –Net 9 14,459,571 12,092,195

Investments in Affiliates 10 19,837,758 21,324,686

Ijara Muntahia Bittamleek Assets–Net 11 134,951,442 110,308,179

Real Estate Investments 12 62,008,391 57,311,157

Good loans-Net 13 8,644,288 11,194,937

Property and Equipment- Net 14 32,710,381 27,462,585

Intangible Assets 15 71,742 416,286

Other Assets 16 6,361,822 5,130,421

Total Assets 2,183,062,940 1,848,373,078

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Consolidated Statement of Financial Position As of December 31, 2009

Notes 2009 2008

JD JD

Liabilities, Equity and Joint Investment Accounts Holders’ Equity

Liabilities

Banks and Banking Institutions Accounts 17 5,197,630 8,525,718

Client Current and Call Accounts (Trust) 18 595,170,473 522,192,026

Cash Margins 19 32,572,095 32,730,860

Accounts Payable 20 1,591,003 2,137,162

Miscellaneous Provisions 21 3,786,312 3,659,312

Income Tax Provision 22 13,115,985 16,125,462

Deferred Tax Liabilities 23 753,825 701,762

Other Liabilities 24 12,235,799 12,044,204

Total Liabilities 664,423,122 598,116,506

Joint investment Accounts Holders’ Equity

Unrestricted Investment Accounts 25 1,295,684,457 1,026,548,510

Investment Account Holders’ Reserve-Subsidiaries 25A 3,666,356 1,815,396

Fair Value Reserve 26 16,477,605 27,426,015

Deferred Tax Liabilities 23 2,481,983 7,295,686

Total Joint Investment Accounts Holders’ Equity 1,318,310,401 1,063,085,607

Non-Controlling Interests 25A 599,661 573,896

Total Joint Investment Accounts Holders’ Equity & Non-Controlling Interests

1,318,910,062 1,063,659,503

Investment Risks Fund 27 20,733,334 22,877,371

Income Tax Provisions of Investment Risks Fund 27 2,165,825 2,730,314

Equity


Paid-up Capital 28 100,000,000 81,250,000

Statutory Reserve 29 26,409,498 22,408,679

Voluntary Reserve 29 5,922,477 12,061,791

General Banking Risks Reserve 29 700,000 600,000

Special Reserve 29 3,011,895 3,011,895

Fair Value Reserve –Net 26 2,117,890 1,978,123

Retained Earnings 30 38,668,837 39,678,896

Total Equity –Shareholders’ Equity 176,830,597 160,989,384

Total Liabilities, Joint Investment Accounts Holders’ Equity, Non-Controlling Interests, and equity

2,183,062,940 1,848,373,078

Accounts Managed for Others

Restricted Investments 53 52,151,402 88,019,087

Muqaradah Bonds 54 226,865,988 224,500,142

Investment by Proxy Accounts 55 9,451,500 9,445,750

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Consolidated Income statementFor the Year Ended December 31, 2009

Notes 2009 2008

JD JD

Deferred Sale Revenues 31 72,885,760 63,987,719

Finance Revenues 32 266,780 264,657

Profits of Financial Assets Held for Trading 33 - 455,041

Profits of Financial Assets Available for Sale 34 11,094,881 25,671,881

Revenues of Financial Assets Held to Maturity 35 291,615 277,322

Dividends Distributed by Affiliates and Subsidiaries 36 1,926,981 738,480

Real Estate Revenues 37 1,564,755 1,252,524

Revenues of Leased Assets and Ijara Muntahia Bittamleek 38 10,390,060 6,951,352

Revenues of other Investments 39 1,401,964 2,151,528

Revenues of Joint Investment Accounts 99,822,796 101,750,504

Net Business Results of Subsidiaries 40 341,004 542,623

Total Revenues of Joint Investment Accounts 100,163,800 102,293,127

Return of Unrestricted Investment Accounts Holders 41 (40,825,180) (33,959,941)Unrestricted Investment Accounts Holders’ Share of the Net Business Results of Subsidiaries

(275,783) (483,953)

Non-Controlling Interest’s Share of the Net Business Results of Subsidiaries

(65,221) (58,670)

Share of the Investment Risk Fund 27 (9,982,280) (10,175,051)

Bank’s Share of the Joint Investment Accounts Revenues as Speculator and Capital Owner

42 49,015,336 57,615,512

Profits of Bank’s Self-Investments 43 423,834 232,211

Bank’s Share of Restricted Investment Revenues as a Speculator 44 3,249,435 8,575,541

Bank’s Share of Restricted Investment Revenues as an Agent 44 47,250 47,250

Banking Services Revenues 45 10,556,204 11,904,017

Foreign Currency Profits 46 1,644,852 1,904,550

Profits of Financial Assets Held for Trading 33 319 52,252

Other Returns 47 2,972,089 3,140,762

Gross Income 67,909,319 83,472,095

Employee expenditures 48 (18,405,385) (16,603,181)

Depreciation and Amortization 14A (2,324,892) (1,731,051)

Other expenses 49 (10,094,355) (11,168,027)

Surplus (Losses) of Assets Impairment– self constructed 13 2,141,258 (3,258,079)

Miscellaneous Provisions 50 (310,328) (650,845)

Total Expenses (28,993,702) (33,411,183)

Profit before Tax 38,915,617 50,060,912

Income Tax 22 (11,026,671) (14,920,269)

Profit after Tax 27,888,946 35,140,643

JD/Fils JD/Fils

Basic Earnings per Share 51 0/279 0/351

71

Consolidated Statement of Comprehensive Income For the Year Ended December 31, 2009

2009 2008

JD JD

Profit for the Year 27,888,946 35,140,643

Add: Other Comprehensive Income Items after Tax

Accumulated Change in Fair Value- Net 139,767 179,283

Total Comprehensive Income for the Year 28,028,713 35,319,926

72

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74

Consolidated Statement of Cash Flows For the Year Ended December 31, 2009

Notes 2009 2008

JD JD

Cash Flows from Operating Activities

Profit before Tax 38,915,617 50,060,912

Amendments to Non-Cash Items:

Depreciations and Amortizations 2,324,892 1,731,051

Receivables and Financing impairment provision 60,630 439,370

Investment Risk Fund 3,493,390 5,606,875

Employee leaves provision 127,000 208,000

End of Service provision 183,328 442,845

(Surplus) Losses of Assets impairment- Self-Constructed (2,141,258) 3,258,079

Exchange Rates Effect on Cash and Cash Equivalent (989,390) (1,096,087)

Profit before Change in Assets and Liabilities 41,974,209 60,651,045

Change in Assets and LiabilitiesDecrease (Increase) in investment Accounts at Banks and Banking Institutions for more than 3 Months

4,711,903 (883,303)

Decrease in Financial Assets Held for trading - 266,234

Increase in Deferred Sales and Other Receivables (106,883,849) (127,266,309)

Increase in Finances (629,639) (938,626)

Increase in Ijara Muntahia Bittamleek Assets (24,643,263) (61,001,921)

Decrease (Increase) in Good Loans 2,550,649 (3,868,333)

(Increase) Decrease in Other Assets (1,231,401) 2,211,021

Increase in Current and Call Accounts 72,978,447 77,199,962

Decrease in Accounts Payable (546,159) (1,014,775)

(Decrease) Increase in Cash Margins (158,765) 13,666,208

Paid End-of-Service Indemnity (183,328) (92,125)

(Decrease) Increase in Other Liabilities (600,664) 8,951,922

Net Cash Flows Used in Operating Activities before Tax (12,661,860) (32,119,000)

Paid Taxes (16,766,462) (10,259,324)

Net Cash Flows Used in Operating Activities (29,428,322) (42,378,324)

Cash Flows from Investing Activities

Selling Financial Assets Held to Maturity 497,349 1,521,988

Purchasing Financial Assets Held to Maturity (2,864,725) (3,545,000)

Selling Financial Assets Available for Sale 11,178,838 32,221,521

Purchasing Financial Assets Available for Sale (23,306,512) (38,664,312)

Selling Real Estate Investments 2,356,638 1,905,709

Purchasing Real Estate Investments (13,377,788) (9,953,398)

Selling Equipment and Property 552,559 944,152

Purchasing Equipment and Property (7,514,439) (8,030,324)

Net Cash Flows Used in Investing Activities (32,478,080) (23,599,664)

Cash Flow from Financing Activities

Increase in Unrestricted Investment Accounts Equity 269,135,947 115,559,473

Dividends Distributed to Shareholders (12,187,500) (7,800,000)

Net Cash Flow from Financing Activities 256,948,447 107,759,473

Exchange Rates Effect on Cash and Cash Equivalent 989,390 1,096,087

Net Increase in Cash and Cash Equivalents 196,031,435 42,877,572

Cash and Cash Equivalent at Year-Beginning 52 671,644,566 628,766,994

Cash and Cash Equivalent at Year-End 52 867,676,001 671,644,566

75

Consolidated Statement of Sources and Uses of the Amounts of Al Qard Al Hasan Fund

For the Year Ended December 31, 2009

2009 2008

JD JD

Year-Beginning Balance 15,806,289 8,741,189

Total 15,806,289 8,741,189

Sources of the Fund Money from:

The amounts that the Bank is authorized to use 17,538,974 14,659,087

Outside the Bank 142,151 46,194

Total Sources of the Fund money during the Year 17,681,125 14,705,281

Uses of the Fund’s Money for:

Education 1,127,725 1,638,391

Medical Treatment 517,246 568,752

Marriage 525,439 557,001

Overdrawn Accounts 9,091,330 13,889,897

Social Advances for the Bank Employees 1,727,478 2,067,054

Discharge of liabilities - 3,049,286

Total Uses During the Year 12,989,218 21,770,381

Year-End Balance 11,114,382 15,806,289

Less: Assets Impairment Provision – Self-Constructed 2,470,094 4,611,352

Year-End Balance 8,644,288 11,194,937

76

Notes to the Consolidated Financial StatementsDecember 31, 2009

1. General

Jordan Islamic Bank was established as a public shareholding limited liability company on November 28, 1978 pursuant to the provisions of the Companies Law No. 12 of 1964, with its Head Office located in Amman.The General Assembly in its extraordinary meeting held on July 27, 2009 agreed to change the Bank’s name to be “Jordan Islamic Bank” instead of “Jordan Islamic Bank for Finance and Investment”. The official procedures to change the name were completed on 30 July 2009.The Bank offers all banking, financial and investment services on an interest-free basis in compliance with the rules and principles of the Islamic Sharia through its head office and branches inside the Kingdom which are 57 branches and 12 banking offices as well as its subsidiaries. In all its transactions, the Bank is governed by the effective Banks Law.The stocks of the Jordan Islamic Bank are listed in Amman Stock Exchange in Amman-Jordan.The consolidated financial statements were approved by the Bank’s Board of Directors in its session No. (1) held on February 11, 2010 and are subject to the approval of the General Assembly of Shareholders.To observe the Bank’s obligations under its Articles of Association and Memorandum of Association to comply with the principles and rules of the Islamic Sharia and in observance of the provisions of the Banks Law; the Bank appoints, based on a decision by the General Assembly of Shareholders, Sharia Supervisory Board of no less than 3 members. The opinion of Sharia Supervisory Board is binding to the Bank, and it is responsible for monitoring the bank’s operations and activities in terms of their compliance with the Sharia principles and state Sharia opinion (Fatwa) on formats of the contracts essential for the operations and activities of the bank, in addition to issuing an annual report to the General Assembly of Shareholders thereon.

2. Significant Accounting Policies:

Bases of Financial Statements Preparation:The consolidated financial statements of the Bank and its subsidiaries financed from the Bank’s funds and the joint investment funds were prepared in accordance with the standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions, in accordance with the effective domestic laws and as per the instructions of the Central Bank of Jordan.The Bank applies the standards issued by the Accounting and Auditing Organization for Islamic financial Institutions.The consolidated financial statements were prepared accorrding to the historical cost principle, other than the financial assets held for trading, financial assets available for sale, investments in Affiliates and real estate whose value is expected to increase and is carried at fair value on the date of financial statements.The Jordanian dinar is the currency of presenting the consolidated financial statements and represents the main currency of the Bank.A distinction should be made between equity holders and joint investment accounts holders.The investment risks fund shall be used to compensate the decrease in finance and investment accounts financed by unrestricted investment accounts.The standards issued by the International Accounting Standards Board and the interpretations issued by the International Financial Reporting Interpretations Committee, which is part of the International Accounting Standards Board, shall be applied in case no standards are issued by the Accounting and Auditing Organization for Islamic Financial Institutions and until Islamic standards are issued to supersede them.The unrestricted investment accounts refer to the joint investment accounts wherever mentioned herein.

77

Changes in Accounting PoliciesThe accounting policies followed in the year correspond to the accounting policies followed last year except that the Bank implemented the interpretations issued by the International Financial Reporting Interpretations Committee and the following amendments to the International Accounting Standards (IAS) effective as from January 1, 2009.

IAS 1: Presentation of Financial Statements– revisedThis standard distinguishes between changes in shareholders equity and other changes in equity. The statement of changes in equity includes the details of transactions with shareholders, while other changes in equity are presented in one separate item. In addition, this standard added the comprehensive income statement presenting all recognized revenue and expense items either in one statement or two related statements for the year ended December 31, 2009.

International Financial Reporting Standard (IFRS) 8- Operating SegmentsThis standard replaced IAS 14 “Segment Reporting”. According to the new standard, the operating segments are similar to the business segments defined previously in IAS 14.

Bases of Financial Statements Consolidation:The consolidated financial statements include the financial statements of the Bank and its subsidiaries financed from the Bank’s funds and the joint investment funds and subject to the Bank’s control. Control exists when the Bank is able to govern the financial and operating policies of subsidiaries in order to benefit from their activities. The transactions, balances, revenues and expenses described in Note (56) between the Bank and subsidiaries shall be eliminated. The financial statements of subsidiaries for the same fiscal year of the Bank shall be prepared using the same accounting policies applied in the Bank. The results of subsidiary operations shall be consolidated in the consolidated income statement as of the date of acquisition, which is the date the Bank’s control over subsidiaries is actually transferred. The results of disposed of subsidiary operations shall be consolidated in the consolidated income statement until the date of disposal, which is the same date the Bank loses control over subsidiaries.In case of preparing separate financial statements for the Bank as an independent entity, the investments in subsidiaries shall be carried at cost.

Segment Information:The business segment represents a group of assets and operations that all combine to provide products or services subject to risks and returns that are different from those related to other business segments, which are measured according to the reports used by the Executive Manager and the key decision maker at the Bank. The geographic segment is associated with the provision of products or services in a specific economical environment subject to risks and revenues different from those of segments operating in other economical environments.

Bases of Distributing Joint Investment Profits between Equity Holders and Unrestricted Investment Accounts Holders:10% shall be allocated to the Investment Risks Fund pursuant to Article (55) of the Jordanian Banks Law.The Bank’s share as speculator was deducted this year at 30% for both Jordanian Dinar and foreign currencies of total investment profits. The remaining balance is distributed between the unrestricted investment accounts and the Bank’s invested funds, each according to the percentage of its contribution to the joint investment funds, taking into consideration that the priority of employing investments belongs to the holders of unrestricted investment accounts.The joint investment accounts shall share the results of investment profits and shall be distributed to depositors, each according to his contribution and as per the terms of the account signed between the Bank and the depositor.

78

The joint investment accounts shall share profits on the following bases:- 50% of the annual rate of saving accounts balance.- 70% of the annual rate of notice accounts balance.- 90% of the lowest balance of time deposit accounts.

The Bank shall bear all administrative expenses and shall not bear any part of the unrestricted investment accounts whatsoever. The unrestricted investment accounts shall not share in any other revenues (banking operations revenues, revenues resulting from investment of current accounts, call accounts and the Bank’s own funds)

Sharia Non-Compliant Revenues, Gains, Expenses and Losses The Bank shall record the revenues, gains, expenses and losses violating the Islamic Sharia in a separate account within the other liabilities. They shall be spent on charitable activities as determined by the Sharia Supervisory Board.

Zakat:The responsibility of Zakat payment falls on shareholders, unrestricted and restricted investment accounts holders and participants in Muqarada bonds portfolios (investment portfolios) once the required conditions are satisfied.

Financial Assets Held for Trading:- They are financial investments acquired or constructed for the purpose of gaining profits through

short-term changes in prices or profit margin.- The financial assets held for trading shall be carried at fair value upon purchase and revalued at fair

value on the date of financial statements. The subsequent changes shall be carried at fair value in the consolidated income statement in the same period of change, including the change of fair value resulting from differences of translating non-cash assets at foreign currencies.

- The dividends or returns shall be carried in the consolidated income statement as realized (to be approved by the General Assembly of Shareholders).

Deferred Sale Receivables:

1-Murabaha Contracts:Murabaha: selling a commodity for the same price at which the seller bought it plus predetermined known profit, at a percentage of the price or a lump sum. It is one of the credit sales that relies on indicating the purchase price or cost.Murabaha to the Purchase-Orderer: an arrangement where the bank sells to a customer (purchase-orderer) a commodity with a specific increase in its price or cost after identifying such increase (Murabaha profit in Wa’ed). It is also called Banking Murabaha. The bank applies the principle of Wa’ed in Murabaha to purchase-orderer contracts as per the standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions.The revenues of deferred sales (whose price is fully paid at once that is due after the current financial period or is paid on installments over several subsequent financial periods) shall be recognized through distributing them to the future financial periods of the deferred period, in such a way that each financial period is allocated a certain share of profits regardless of whether or not payment is made in cash.Deferred sale receivables shall be carried at their face value as they occur and are measured at the end of the financial period on the basis of net realizable cash value.

2-Assets Available for Forward Sale:The assets acquired by the bank for the purpose of selling them on basis of forward sale (in installments). This type of selling assets is also called installment-bargain sale to distinguish it from Murabaha to purchase-orderer.The assets available for forward sale shall be carried at cost upon contracting and are measured on the basis of cost (purchase value and any direct expenses related to acquisition)

79

The assets available for forward sale shall be evaluated at the end of the financial period at their fair value and the change amount resulting from valuation–if any- shall be measured on the basis of the difference between the book value and the fair value. Unrealized Profits (losses) shall be recognized in the fair value reserve account.Profits in the forward sale transactions shall be recognized according to the accrual basis and distributed to the financial periods of the contract term. The profits of the upcoming years shall be recorded in the forward sale revenues account.The forward sale receivables shall be carried at their face value upon contracting (contracted value).

Musharaka Financing:

An arrangement where the bank and the client offer money in equal or different portions to establish a new project or contribute to an existing one, so that each party owns a share in the capital on a constant or diminishing basis and is entitled to payable dividends. Losses shall be shared according to each partner’s share in the capital and it is prohibited to stipulate otherwise. This type of financing is divided into constant Musharaka and diminishing Musharaka ending in ownership.The bank’s share in Musharaka capital shall be recorded upon delivery to the managing partner or deposit in the Musharaka Account and is measured at the value of the amount paid in cash or the fair value if it is in kind. If property valuation results upon contracting into a difference between the fair value and the book value, the difference shall be recognized as profit or loss.The bank’s share in the constant Musharaka capital at the end of the financial period shall be measured at the historical cost. In case of diminishing Musharaka , the capital shall be measured at the end of the financial period at the historical value less the historical value of the sold share at the fair value agreed upon. The difference between the two values shall be recognized as profit or loss in the consolidated income statement.The bank’s share in the profits or losses of Musharaka financing transactions which start and end during the financial period shall be recorded after liquidation. In case the Musharaka continued for more than one financial period, the bank’s share of the profits shall be recorded upon realization through complete or partial sharing of profits between the bank and the partner in the financial period where it occurred and within the limits of the distributed profits. As for the bank’s share of the losses for a financial period, it shall be recognized in the bank’s books for that period and within the limits of the losses by which the bank’s share in Musharaka capital is reduced.In case of losses as a result of the partner’s violation or negligence, the partner shall incur those losses as receivables.An impairment provision shall be established for deferred sale and other receivables if the amounts payable to the bank are uncollectable, an objective evidence of an event adversely affecting the future cash flows of deferred sale and other receivables is available and such impairment can be estimated. The provision value shall be recorded in the consolidated income statement. At the end of the financial period, the financing assets shall be recorded at cost or at the realizable cash value, whichever lower, and the difference shall be recorded as a provision of financing impairment.The revenues of non-performing deferred sales granted to clients shall be suspended according to the instructions of the Central Bank of Jordan.The deferred sale receivables and finances funded by unrestricted investment accounts are written off in case the procedures taken to collect them from the Investment Risk Fund are ineffective (except what is granted/financed and then written off from the deferred sale receivables and finances in the same year, as it is recorded in the consolidated income statement/charged to the investment revenues). The collected amounts from receivables/finances previously written off are added to the Investment Risk Fund (except what is recorded in the income statement/charged to the investment revenues). As for the deferred sale receivables and finances funded by the bank’s own funds and for which an impairment provision is allocated, they shall be written off in case the procedures taken to collect them are ineffective by deducting them from the provision. In addition, any surplus in the total provision, if any, shall be transferred to the consolidated income statement, and the amounts collected from previously written off receivables/finances shall be added to revenues.

80

Financial Assets Available for Sale:Financial assets available for sale are other assets (investments) not held for trading, not held to maturity and not established by the Bank.Financial assets available for sale shall be carried at fair value in addition to the acquisition expenses upon purchase and are subsequently revalued to fair value. The change in fair value shall be stated in the fair value reserve item within the equity of unrestricted investment accounts holders and within the equity accounts in case these assets are financed by the Bank’s own funds.Unrealized losses resulting from valuation of financial assets available for sale shall be recorded in the fair value reserve item.In case these assets or part of them is sold or their value is impaired, resulting profits and losses shall be recorded in the consolidated income statement, including the amounts previously stated in unrestricted investment account holders equity or in equity accounts related to these assets.The impairment loss previously stated in the consolidated income statement is recoverable if it is objectively evident that the increase in fair value occurred in a period subsequent to stating impairment losses through fair value reserve.The profits resulting from financial assets available for sale shall be stated in the consolidated income statement on the date of distribution.The profits and losses resulting from differences of translating foreign currencies of equity instruments are stated in the fair value reserve item.The financial assets whose fair value cannot be reliably determined shall be stated at cost and any impairment in their value shall be stated in the consolidated income statement.

Financial Assets Held to Maturity:They are the assets (investments) that the Bank has a positive intent and ability to hold until the maturity date.They are carried at cost in addition to any direct expenses related to acquisition. In case of impairment that results in non-recoverability of the asset or any part of it at the end of the financial period, it shall be stated in the consolidated income statement as an impairment loss and these investments shall be stated at fair value after taking impairment value into consideration.It is not allowed to reclassify any financial assets from or to this item except in cases specified in the accounting standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions.

Investments in Affiliates:Affiliates are those companies over which the Bank exercises significant influence on decisions related to financial and operating policies, and are not subject to the Bank’s control, and in which the Bank owns from 20% up to 50% of the voting rights.Investment in Affiliates shall be carried at fair value. The difference between the cost and fair value shall be recorded in the change in fair value account within the fair value reserve item in the unrestricted investment accounts holders’ equity and within equity in case those investments are financed by the Bank’s own funds.

Ijarah and Ijarah Muntahia Bittamleek:Ijarah is hiring an asset for consideration and is divided into:

Operating Lease: a lease contract which does not end in the lessee’s ownership of the leased assets.Lease ending-in-Onwership “Ijarah Muntahia Bittamleek”: a lease contract which ends in the lessee’s ownership of the leased assets. It takes different forms as mentioned in the Ijarah and Ijarah Muntahia Bittamleek Standard issued by the Accounting and Auditing Organization for Islamic Financial Institutions.

The assets acquired for Ijarah are measured at historical cost upon acquisition, including the direct expenses required to make them serviceable. The leased assets are depreciated according to the depreciation policy followed at the Bank.When the amount recoverable from any assets acquired for Ijarah is less than their net book value, their value shall be reduced to the recoverable value. The impairment value shall be stated in the consolidated income statement.Ijarah revenues shall be distributed in consistence with the financial periods covered by the Ijarah contract.

81

The expenses of leased assets maintenance shall be stated in the financial period where they occur.

Real Estate InvestmentsIt is acquisition of land or building or part of them to earn periodic rentals, to hold them for capital appreciation or both. Real estate investments acquired for capital appreciation shall be carried at cost in addition to acquisition expenses upon purchase, and shall be subsequently revalued to fair value. Any change in fair value shall be stated in the fair value reserve item within unrestricted investment account holders’ equity and within equity accounts in case these assets are financed by the Bank’s own funds.Unrealized losses resulting from valuation of real estate investments acquired for capital appreciation shall be stated in fair value reserve item to the extent permissible by the balance of such reserve. In case unrealized losses exceed the balance of this reserve, the excess amount shall be recorded in the consolidated income statement under the item of unrealized profits (losses) of Real Estate Investments acquired for capital appreciation.In case unrealized losses were recorded in previous financial period and valuation profits (unrealized) occurred in a subsequent financial period, then these profits shall be recorded in the consolidated income statement to the extent equal to the unrealized losses recorded in the consolidated income statement in previous periods. Any surplus in these profits shall be added to the fair value reserve. Realized profits (losses) resulting from the sale of any Real Estate Investments acquired for capital appreciation shall be measured on the basis of the difference between the book value and the net amount arising from the sale process. The outcome in addition to the previous share of this investment in the fair value reserve- if any- shall be recorded in the consolidated income statement of the current financial period.Real estate investments acquired to earn periodic rentals shall be carried at cost in addition to any acquisition-related expenses. This property shall be depreciated according to the depreciation policy followed at the Bank. When the recoverable amount in any of this property is less than their net book value, their value shall be reduced to the recoverable value and the impairment value shall be recorded in the consolidated income statement.

Joint Investment Risk Fund:The Bank deducts not less than 10% of the net profits of joint investment realized from various current transactions during the period. The above rate might increase pursuant to the directives of the Central Bank. The amended rate shall be effective after being increased in the fiscal year subsequent to the year in which the amendment is approved.The balance of the Joint Investment Risk Fund devolves to the Zakat fund after covering all expenses and losses for which the Fund was established to cover or amortize. Accordingly, the investors in the Islamic Bank shall have no right in the amounts deducted at the approved accumulated rate in the Joint Investment Risk Fund, as these are amounts are allocated to cover the losses of the joint investment operations.If any losses occurred in some joint investment operations that started and were completed in a certain year, these losses shall be covered by the profits realized in other joint investment operations that started and were completed within the same year. If losses exceed profits in the same year, then they shall be covered by the Joint Investment Risk Fund. If joint investment operations started and continued in previous years and it was found out in a certain year that such investment operations were failed operations in terms of results, their losses shall be covered by the Joint Investment Risk Fund.

Fair Value of Financial Assets:The closing prices (purchasing assets/selling liabilities) on the date of financial statements in active markets shall represent the fair value of financial instruments with market prices. In case there are no quoted prices, no active circulation of some financial instruments or the market is inactive; their fair value shall be estimated by comparing it to the current market value of a substantially similar financial instrument.In case of financial instruments whose fair value cannot be reliably measured, they shall be stated at cost after deducting any impairment in their value.

82

Impairment of Financial Assets:The Bank shall review the values entered in records for financial assets on the date of the financial position statement to determine whether there is any indication of impairment in their values, individually or collectively. If any such indication of impairment exists, the recoverable value shall be estimated in order to determine the impairment loss.

Fair Value of Non-Financial Assets Stated at Fair Value:The market prices on the date of financial statements (when active markets for such assets exist) shall represent the fair value of non-financial assets stated at fair value. When such markets do not exist, they shall be estimated on the date of financial statements by taking the arithmetic mean of the estimated of three licensed and approved expertise houses.

Depreciation:A-Depreciation of Assets Available for Investment:

The assets available for investment shall be depreciated according to the policy adopted by the Bank related to the investment of these assets. In addition, these assets shall be depreciated according to their useful life based on straight-line depreciation method.

B-Property and Equipment:The property and equipment shall be carried at cost after deducting the accumulated depreciation and any impairment. The property and equipment (except lands) shall be depreciated when they are ready for use according to the straight-line depreciation method over their expected useful life using the following rates:

Item %

Buildings 2%

Equipment, Appliances, Furniture 2.5% - 15%

Means of Transportation 15%

Computers 25%

The useful life of property and equipment shall be reviewed at the end of each year. If the useful life expectations are different from pre-prepared estimates, the change shall be recorded in the estimate of subsequent years, as considered a change in estimates.When the amount recoverable from property, equipment and assets available for investment is less than their net book value, their value shall be reduced to the recoverable value and the impairment value shall be stated in the consolidated income statement.

Intangible Assets:The intangible assets shall be classified on the basis of estimating their life for definite or indefinite period of time. The intangible assets with definite life shall be amortized during this lifetime and the amortization shall be recorded in the consolidated income statement. As for the intangible assets with indefinite life, the impairment in their value shall be reviewed on the date of financial statements and any impairment shall be stated in the consolidated income statement.The intangible assets resulting from the Bank’s transactions shall not be capitalized and shall be recorded in the consolidated income statement in the same period.Any indications of intangible assets impairment shall be reviewed on the date of financial statements. Also, the life of those assets shall be reviewed and any amendments shall be made to subsequent periods.Following is the accounting policy for each item of the Bank’s intangible assets:

Item %

Computer Programs 25%

83

Assets Devolving to the Bank to Repay Payable Debts:The assets devolving to the Bank in repayment of payable debts shall be stated at fair value in the statement of financial position within Real Estate Investments.

Provisions:Provisions shall be recognized when there are obligations due upon the Bank on the date of the financial position statement as a result of previous events, the fulfillment of obligations is probable and their value can be reliably measured.

End of Service Indemnity:The end of service indemnity shall be calculated pursuant to the provisions of the Labor Law and the Bank’s bylaws.

Employee Leaves provision:The employee leaves provision shall be calculated pursuant to the Bank’s bylaws, and the amounts shall be transferred to this provision in accordance with the accrual basis.

Income tax:Tax expenses shall represent the accrued and deferred taxes.Accrued tax expenses shall be calculated on the basis of taxable profits. The taxable profits differ from profits declared in the financial statements, as declared profits include non-taxable revenues, non-deductable expenses in the fiscal year but rather in subsequent years, accumulated taxably accepted losses or non-deductable items for tax purposes.The Bank shall deduct income tax provision pursuant to the Income Tax Law No. 57 of 1985 and its subsequent amendments as well as the International Accounting Standard No. 12 which requires recognition of deferred taxes resulting from time differences of fair value reserve. Accordingly, the Bank may incur deferred tax liabilities.Deferred taxes are those which are expected to be paid or recovered as a result of temporary time differences between the value of assets or liabilities in the financial statements and the value on which the tax profit is calculated. The deferred taxes are calculated using the method of commitment to the statement of financial position, and the deferred taxes shall be calculated according to the tax rates expected to be applied upon settlement of tax obligation or realization of deferred tax assets.The balance of deferred tax assets shall be reviewed on the date of financial statements and shall be reduced in case it is not probable to wholly or partially benefit from those tax assets.

Capital:Costs of Issuing or Purchasing the Bank’s Stocks:

Any costs resulting from issuing or purchasing the Bank’s stocks shall be charged to the retained earnings (on net basis after the tax effect of these costs, if any). If the issuance or purchasing is not completed, these costs shall be recorded as expenses in the consolidated income statement.

Accounts Managed for Clients:They are the accounts managed by the Bank on behalf of its clients and shall not be considered as part of the Bank’s assets. The charges and commissions of managing these accounts shall be stated in the consolidated income statement.

Offsetting:Financial assets and financial liabilities shall be offset. The net amount shall be stated in the statement of financial position only when the legal binding rights are available and when they are settled on the basis of offsetting, or when the realization of assets and settlement of liabilities occur at the same time.

84

Revenues Realization and Expenses Recognition:Revenues are realized and expenses are recognized on accrual basis, other than deferred sale revenues and non-operating finances that are not recognized as revenues and are stated in the outstanding revenues account.The commissions shall be recorded as revenues upon offering relevant services, and the dividends of companies’ stocks shall be recognized upon realization (approved by the General Assembly of Shareholders).

Date of Recognizing Financial Assets:The purchase and selling of financial assets shall be recognized on the date of trading (the date of the Bank’s commitment to sell or purchase financial assets).

Foreign Currencies:Transactions in foreign currencies during the year shall be recorded at the prevailing exchange rates on the date of transaction (Exchange/Taqabud).The balances of financial assets and financial liabilities shall be translated at the prevailing average exchange rates of foreign currencies on the date of financial position statement declared by the Central Bank of Jordan.Non financial assets and non financial liabilities shall be translated at foreign currencies and shall be stated at fair value on the date of determining their fair value.The profits and losses resulting from foreign currencies translation shall be stated in the consolidated income statement.The translation differences of non-cash assets and liabilities at foreign currencies (such as stocks) shall be recorded in the fair value reserve.

Cash and Cash Equivalent:It is cash and cash balances that are due within three months and include: cash, balances at central banks and balances at banks and banking institutions. The deposits of banks and banking institutions that are due within three months as well as restricted balances shall be deducted.

3. Using Estimates:The preparation of financial statements and the application of accounting policies require the Bank’s management to make estimates and judgments affecting the amounts of financial assets and liabilities and to disclose contingent liabilities. Furthermore, these estimates and judgments shall affect revenues, expenses and provisions as well as the changes in fair value stated in both equity and unrestricted investment account holders’ equity. Particularly, the Bank’s management shall be required to issue significant judgments to estimate the amount and timing of future cash flows. The said estimates are essentially based on multiple assumptions and factors with varying degrees of estimation and uncertainty. The actual results might differ from estimates as a result of the changes induced by the conditions and circumstances of those estimates in the future.We believe that our estimates in light of the financial statements are reasonable, and they are detailed as follows:

- Impairment provision of sale receivables and finances: the Bank shall deduct 10% of the net revenues of joint investment accounts to be transferred to the Joint Investment Risk Fund in accordance with Article 55 of the Banks Law. Then this rate shall be compared to the provision of these receivables and finances within the bases established by the Central Bank of Jordan.

- Income Tax Provision: income tax shall be charged to the relevant fiscal year in accordance with the accounting systems, laws and standards. Deferred tax assets and liabilities as well as the necessary tax provision shall be calculated and stated.

- The Bank’s management shall carry out a periodic review of the financial assets carried at cost to estimate any impairment in their value, and impairment is stated according to the financing body of those investments.

85

4. Cash and Balances at Central Banks:The details of this item are as follows:

2009 2008

JD JD

Cash in Treasury 39,509,737 36,466,988

Balances at the Central Bank of Jordan

Current Accounts 604,718,677 410,678,702

Mandatory Cash Reserve 127,022,809 129,886,299

Total Balances at the Central Bank of Jordan 731,741,486 540,565,001

Total 771,251,223 577,031,989

In compliance with the rules of the Islamic Sharia and in accordance with the Articles of Association and Memorandum of Association, the Bank does not charge any interests on balances and current accounts with the Central Bank of Jordan.The amounts of JD 18,320,630 and JD 45,213,419 were deducted as of December 31, 2009 and December 31, 2008 consecutively, representing cash balances of restricted investment accounts and Muqarada Bonds accounts not yet invested.

5. Balances at Banks and Banking InstitutionsThe details of this item are as follows:

Local Banks and Banking Institutions

Foreign Banks and Banking Institutions

Total

2009 2008 2009 2008 2009 2008

JD JD JD JD JD JD

Current and Call Accounts 15,400,255 23,626,086 39,307,538 46,260,109 54,707,793 69,886,195

Unrestricted Investment Accounts that are due within 3 months or less

- - 46,914,615 33,252,100 46,914,615 33,252,100

Total 15,400,255 23,626,086 86,222,153 79,512,209 101,622,408 103,138,295

In compliance with the rules of the Islamic Sharia and in accordance with the Articles of Association and Memorandum of Association, the Bank does not charge any interest on balances and current accounts at local and foreign banks and banking institutions.

6. Investment accounts at Banks and Banking Institutions The details of this item are as follows:

Foreign Banks and Banking Institutions

2009 2008

JD JD

Accounts due within 3-6 months 3,545,000 5,420,903

From 6-9 months - 709,000

From 9-12 months 1,063,500 1,772,500

More than one year - 1,418,000

Total 4,608,500 9,320,403

86

7. Deferred Sale Receivables and Other Receivables –NetThe details of this item are as follows:

Joint Self Total

2009 2008 2009 2008 2009 2008

JD JD JD JD JD JD

Individuals (Retail)

Murabaha to the Purchase-Orderer 384,049,280 386,329,526 - - 384,049,280 386,329,526

Forward Sale 2,054,906 1,859,393 - - 2,054,906 1,859,393

Client Receivables - - 5,432,991 2,333,127 5,432,991 2,333,127

Property Financing 249,893,425 200,332,652 - - 249,893,425 200,332,652

Major Companies

International Murabaha 47,140,097 13,001,012 - - 47,140,097 13,001,012


Small and Medium Enterprises


Client Receivables 581,075 434,048 - - 581,075 434,048

Total 1,053,929,398 919,285,303 5,432,991 2,333,127 1,059,362,389 921,618,430

Less: Deferred Revenues* (121,313,930) (96,760,880) - - (121,313,930) (96,760,880)

Less: Outstanding Revenues** (4,346,242) (3,766,017) - - (4,346,242) (3,766,017)

Less: Impairment Provision (20,095,896) (14,429,691) (500,000) (439,370) (20,595,896) (14,869,061)

Net Deferred Sales and OtherReceivables

908,173,330 804,328,715 4,932,991 1,893,757 913,106,321 806,222,472

* Deferred revenues include both Murabaha to the purchase-orderer and deferred forward sale revenues.** Outstanding revenues include both Murabaha to the purchase-orderer and outstanding forward sale revenues.

Transactions in forward sale receivables were as follows:

Forward Sale Receivables Deferred Revenues

JD JD

Year-Beginning Balance 1,859,393 47,467

Additions 858,884 118,195

Deletions (663,371) (50,572)

Year-End Balance 2,054,906 115,090

(7.A) Finances –NetThe details of this item are as follows:

Joint Self-Constructed Total

2009 2008 2009 2008 2009 2008

JD JD JD JD JD JD

Individual (Retail)

Diminishing Musharaka 14,628,245 13,946,342 528,387 543,679 15,156,632 14,490,021

Less: Impairment Provision (186,678) (149,706) - - (186,678) (149,706)

Net Finances 14,441,567 13,796,636 528,387 543,679 14,969,954 14,340,315

87

Deferred sales and other receivables and non-operating finances amounted to JD 44,445,224 as of December 31, 2009, i.e. 4,09% of the balance of deferred sales and other receivables and finances compared to JD 36,378,214 as of December 31, 2008, i.e. 3,82% of the granted balance.After deduction of outstanding revenues, the deferred sale receivables, other receivables and non-operating finances amounted to JD 40,098,982 as of December 31, 2009, i.e. 3,69% of the balance of deferred sale receivables, other receivables and finances after deducting the outstanding revenues compared to JD 32,612,197 as of December 31, 2008, i.e. 3,42% of the granted balance.As of December 31, 2009 and December 31, 2008, there are no deferred sale receivables, other receivables and finances granted to or guaranteed by the Jordanian government.

Outstanding RevenuesFollowing are the transactions related to outstanding revenues:

2009

Joint

Individuals Property

Financing Major

Companies

Small & Medium

EnterprisesTotal

JD JD JD JD JD

Year-Beginning Balance 2,256,081 916,394 343,316 250,226 3,766,017

Add: outstanding revenues during the year 2,002,946 973,669 401,343 762,259 4,140,217

Less: outstanding revenues transferred to the revenues

(2,132,660) (866,261) (324,534) (236,537) (3,559,992)

Year-End Balance 2,126,367 1,023,802 420,125 775,948 4.346,242

2008

Joint

Individuals Property

Financing Major

Companies

Small & Medium

EnterprisesTotal

JD JD JD JD JD

Outstanding Revenues during the year 2,256,081 916,394 343,316 250,226 3,766,017

Year-end Balance 2,256,081 916,394 343,316 250,226 3,766,017

(8) Financial Assets Available for Sale

Joint Self-Constructed Total

2009 2008 2009 2008 2009 2008

JD JD JD JD JD JD

Financial assets with market prices

Companies’ Stocks 34,271,308 29,128,515 567,082 287,307 34,838,390 29,415,822

Total financial Assets with Market Prices

34,271,308 29,128,515 567,082 287,307 34,838,390 29,415,822

Financial assets without market prices

Companies’ Stocks 1,586,620 1,586,620 5,176,038 4,668,625 6,762,658 6,255,245

Islamic Banks Portfolio 709,000 709,000 - - 709,000 709,000

Muqarada Bonds 52,268,500 52,818,500 2,500,000 2,500,000 54,768,500 55,318,500

Participation in Investment Funds 1,380,591 1,380,591 - - 1,380,591 1,380,591

Total Financial Assets withoutMarket Prices

55,944,711 56,494,711 7,676,038 7,168,625 63,620,749 63,663,336

Total of Financial Assets Available for Sale

90,216,019 85,623,226 8,243,120 7,455,932 98,459,139 93,079,158

88

(9) Financial Assets Held to Maturity- Net The details of this item are as follows:

Joint Total

2009 2008 2009 2008

JD JD JD JD

Total Financial Assets without Market Prices

Islamic Banks Portfolio 4,176,252 3,084,027 4,176,252 3,084,027

Islamic Sukuk 5,317,500 3,545,000 5,317,500 3,545,000

Participation in Investment Funds 4,965,819 5,463,168 4,965,819 5,463,168

Total of Financial Assets Held to Maturity 14,459,571 12,092,195 14,459,571 12,092,195

The above assets shall be due within a period of one month to two years.Investment funds are divided into funds whose profits and capital accrue on maturity date and funds whose profits accrue each three or six months. The profits of leasing Sukuk are received every six months.

(10) Investments in Affiliates:A. Investments in Affiliates /Joint

Country of

Establ-ishment

Owne-rship rate

Nature of Activity

Date ofpreparingfinancial

statements

Year ofOwner-

shipCost of Investment

Fair value of Investment

Affiliates /Joint 2009 2008 2009 2008

JD JD JD JDJordan Center for International Trading Co

Jor. 28,4 Commercial31

December1983 1,069,932 1,069,932 1,214,640 3,152,280

AlAmin Investment Co.

Jor. 29,7 Services31

December1995 4,061,558 2,400,812 4,932,599 6,700,606

Islamic Insurance PLC.

Jor. 33,2 Insurance31

December1995 4,604,072 2,827,825 7,772,700 8,119,000

Arabian Steel Pipes Mfg. Co.

Jor. 26 Industrial 31

December1994 5,127,585 2,665,632 5,499,000 3,352,800

Total Affiliates 14,863,147 8,964,201 19,418,939 21,324,686

Investments in affiliates were not stated under the equity method as they are insignificant to the financial position and as they are mainly financed by the unrestricted investment accounts holders. Investments in affiliates are carried at fair value, noting that their book value is JD 14,863,147 as of December 31, 2009 compared to JD 8,964,201 as of December 31, 2008.

B. Investments in Affiliates /Self Constructed

Country of Establ-ishment

Ownership rate

Nature of Activity

Date ofpreparingfinancial

statements

Year ofOwnership

Cost of InvestmentFair value of Investment

Affiliates /Self-Constructed 2009 2008 2009 2008

JD JD JD JDAl Sanabel for Financial Investments Company/Syria

Syria 20 brokerage31

December2009 418,819 - 418,819 -

Total Affiliates /Self-Constructed 418,819 - 418,819 -

Total Affiliates 15,281,966 8,964,201 19,837,758 21,324,686

89

Investments in affiliates /self-constructed investment are carried at cost upon acquisition, and are revalued under the equity method. The share of profits and losses is recorded in the consolidated income statement.

(11) Assets of Ijarah Muntahia Bittamleek- Net The details of this item are as follows:

2009

Joint

Cost Accumulated Depreciation Net Value

Assets of Ijarah Muntahia Bittamleek 164,686,193 (29,734,751) 134,951,442

Total 164,686,193 (29,734,751) 134,951,442

2008

Joint

Cost Accumulated Depreciation Net Value

Assets of Ijarah Muntahia Bittamleek 126,589,190 (16,281,011) 110,308,179

Total 126,589,190 (16,281,011) 110,308,179

The total accrued Ijara installments amounted to JD 811,899 as of December 31, 2009 compared to JD 567,987 as of December 31, 2008.The total non-operating Ijara installments amounted to JD 8,417,871 as of December 31, 2009 compared to JD 4,735,619 as of December 31, 2008.

(12) Real Estate InvestmentsA. Acquired for capital appreciation:Details of this item are as follows:

Joint Total

2009 2008 2009 2008

JD JD JD JD

Real Estate Investments 56,339,073 57,311,157 56,339,073 57,311,157

Total 56,339,073 57,311,157 56,339,073 57,311,157

The real estate investments are carried at fair value, noting that its book value (cost) is JD 43,378,511 as of December 31, 2009 compared to JD 36,525,317 as of December 31, 2008.

B. Acquired to earn periodic revenues :Details of this item are as follows:

Joint Total

2009 2008 2009 2008

JD JD JD JD

Cost 5,873,526 - 5,873,526 -

Accumulated Depreciation (204,208) - (204,208) -

Net Book Value 5,669,318 - 5,669,318 -

Total Real Estate Investments 62,008,391 57,311,157 62,008,391 57,311,157

90

(13) Good Loans (Al Qard Al Hassan)- Net:Details of this item are as follows:

2009 2008

JD JD

Good Loans 11,114,382 15,806,289

Less: Assets Impairment Provision-Self Constructed * (2,470,094) (4,611,352)

Good Loans-Net 8,644,288 11,194,937

*The transactions of assets impairment provision-self constructed are as follows:

2009

ItemYear-Beginning

BalanceFormed

during the year

TransferredTo the Provision during the Year

TransferredTo Revenues

Year–End Balance

JD JD JD JD JD

Assets Impairment provision-Self Constructed

4,611,352 - - (2,141,258) 2,470,094

Total 4,611,352 - - (2,141,258) 2,470,094

2008

Item

Year-Beginning Balance

Formedduring the year

TransferredTo the Provision during the year

TransferredTo Revenues

Y ear–End Balance

JD JD JD JD JDAssets Impairment provision-Self Constructed

1,414,585 3,258,079 (61,312) - 4,611,352

Total 1,414,585 3,258,079 (61,312) - 4,611,352

91

(14) Property and Equipment- NetDetails of this item are as follows:

2009

Lands Buildings Equipment,

Devices, Furniture

Transport-ation

Computers Total

JD JD JD JD JD JDCost

Year-Beginning Balance 4,936,007 17,306,584 19,077,873 1,127,450 6,886,484 49,334,398

Additions - - 5,333,611 - 1,128,787 6,462,398

Deletions - - (450,365) (40,000) (1,030,643) (1,521,008)

Year-End Balance 4,936,007 17,306,584 23,961,119 1,087,450 6,984,628 54,275,788

Accumulated Depreciation

Year-Beginning Balance - (3,120,726) (14,127,991) (435,412) (5,851,783) (23,535,912)

Depreciation for the year - (278,066) (1,461,259) (69,149) (382,831) (2,191,305)

deletions - - 378,012 39,999 1,030,290 1,448,301

Year-End Balance - (3,398,792) (15,211,238) (464,562) (5,204,324) (24,278,916)

Net book value of property and equipment

4,936,007 13,907,792 8,749,881 622,888 1,780,304 29,996,872

Payments for the purchase of property and equipment

- - 321,562 - - 321,562

Projects in Progress - 2,391,947 - - - 2,391,947

Net property and equipment at the end of the year

4,936,007 16,299,739 9,071,443 622,888 1,780,304 32,710,381

2008

Lands Buildings Equipment,

Devices, Furniture

Transport-ations

Computers Total

Cost JD JD JD JD JD JD

Year-Beginning Balance 3,663,571 14,651,838 17,940,571 1,155,748 6,016,450 43,428,178

Additions 1,272,436 2,699,996 1,151,694 - 924,436 6,048,562

Deletions - (45,250) (14,392) (28,298) (54,402) (142,342)

Year-End Balance 4,936,007 17,306,584 19,077,873 1,127,450 6,886,484 49,334,398

Accumulated Depreciation

Year-Beginning Balance - (2,848,885) (13,158,753) (371,396) (5,543,146) (21,922,180)

Depreciation for the year - (271,841) (974,766) (64,016) (310,288) (1,620,911)

deletions - - 5,528 - 1,651 7,179

Year-End Balance - (3,120,726) (14,127,991) (435,412) (5,851,783) (23,535,912)

Net book value of property and equipment

4,936,007 14,185,858 4,949,882 692,038 1,034,701 25,798,486

Payments for the purchase of property and equipment

- - 209,895 - - 209,895

Projects in progress - 1,454,204 - - - 1,454,204

Net property and equipment at the end of the year

4,936,007 15,640,062 5,159,777 692,038 1,034,701 27,462,585

92

(14 a) Depreciation and AmortizationDetails of this item are as follows:

2009 2008

JD JD

Property & Equipment Depreciation 2,191,305 1,620,911

Intangible Assets Amortization 35,167 35,140

Goodwill allowance Amortization 98,420 75,000

Total 2,324,892 1,731,051

(15) Intangible AssetsDetails of this item are as follows:

2009 2008

Computer Systems and Software Computer Systems and Software

JD JD

Year-Beginning Balance 416,286 645,111

Additions 2,631 116,000

Deletions (312,008) (309,685)

Amortization for the Year (35,167) (35,140)

Year-End Balance 71,742 416,286

(16) Other AssetsDetails of this item are as follows:

2009 2008

JD JD

Receivable Revenues 1,359,053 1,232,680

Pre-paid Expenses 62,176 20,686

Temporary Debit Accounts 1,873,051 1,555,979

Stationery and Publications 515,077 468,809

Pre-paid Leases 432,165 386,210

Revenues and Mail Stamps 390,716 293,131

Credit Card Accounts 648,510 104,070

Trusts of Settlement Guarantee Funds 57,000 708,000

Unpaid Accepted Guaranteed Due Promissory Notes 669,647 61,738

Others 354,427 299,118

Total 6,361,822 5,130,421

93

(17) Banks and Banking Institutions AccountsDetails of this item are as follows:

2009 2008

Inside the Kingdom

Outside the Kingdom

Total Inside the Kingdom

Outside the Kingdom

Total

JD JD JD JD JD JD

Current and Call Accounts

- 5,197,630 5,197,630 - 8,525,718 8,525,718

Total - 5,197,630 5,197,630 - 8,525,718 8,525,718

(18) Client Current and Call Accounts (Trust)Details of this item are as follows:

2009

Individuals Major

Companies

Small and Medium

Enterprises

Government and Public

SectorTotal

JD JD JD JD JD

Current Accounts 367,805,088 76,877,243 51,989,169 6,915,310 503,586,810

Call Accounts 91,436,167 28,592 118,904 - 91,583,663

Total 459,241,255 76,905,835 52,108,073 6,915,310 595,170,473

2008

Individuals Major

Companies

Small and Medium

Enterprises


SectorTotal

JD JD JD JD JD

Current Accounts 361,827,400 6,710,864 70,336,388 9,336,776 448,211,428

Call Accounts 73,929,235 - 51,363 - 73,980,598

Total 435,756,635 6,710,864 70,387,751 9,336,776 522,192,026

The public sector deposits inside the Kingdom amounted to JD (6,915,310), i.e. 1, 16% of the total current and call accounts of clients as of December 31, 2009 compared to JD (9,336,776), i.e. 1.79% as of December 31, 2008. Dormant accounts amounted to JD (9,355,394) as of December 31, 2009 compared to JD (7,390,768 )as of December 31, 2008.

94

(19) Cash Margins Details of this item are as follows:

2009 2008

JD JD

Deposits against Sale and Finance Receivables and Other Receivables 16,690,471 17,568,410

Deposits against Indirect Facilities 15,277,679 14,131,323

Other Deposits 603,945 1,031,127

Total 32,572,095 32,730,860

(20) Accounts PayableDetails of this item are as follows:

2009 2008

JD JD

Client Accounts Payable 1,591,003 2,137,162

Total 1,591,003 2,137,162

(21) Other ProvisionsDetails of this item are as follows:

2009

Year- Beginning Balance

Formedduring the

year

Usedduring the

year

Transferredduring the

year

Year-End Balance

JD JD JD JD JD

End of Service Provision

1,000,000 183,328 (183,328) - 1,000,000

Employee Leaves Provision

1,373,000 127,000 - - 1,500,000

General Provision 1,286,312 - - - 1,286,312

Total 3,659,312 310,328 (183,328) - 3,786,312

2008

Year- Beginning Balance

Formedduring the

year

Usedduring the

year

Transferredduring the

year

Year-End Balance

JD JD JD JD JD

End of Service Provision

649,280 442,845 (92,125) - 1,000,000

Employee Leaves Provision

1,165,000 208,000 - - 1,373,000

General Provision 1,366,941 - (148,319) 67,690 1,286,312

Total 3,181,221 650,845 (240,444) 67,690 3,659,312

95

(22) Banks̀ Income Tax:A. Bank`s Income Tax ProvisionThe transactions of the Bank`s income tax provision are as follows:

2009 2008

JD JD


Paid Income Tax (14,036,148) (10,176,264)

Accrued Income Tax 11,026,671 14,920,269

Year-End Balance 13,115,985 16,125,462

B. The Income tax stated in the consolidated statement represents the following:

2009 2008

JD JD

Accrued Income Tax for the Year Profits 11,026,671 14,920,269

Total 11,026,671 14,920,269

The taxes payable on the Bank until the end of 2008 were settled.

(23) Deferred Tax Liabilities:Details of this item are as follows:

2009 2008

Beginning-Year Balance

ReleasedAmounts

AddedAmounts

End-Year Balance

Deferred Tax

Deferred Tax

JD JD JD JD JD JD

a. Joint deferred tax liabilities *

Securities Available-for-Sale13,935,861 (7,936,835) - 5,999,026 1,574,744 3,658,164

Real Estate Investmentsfor capital appreciation

20,785,840 (7,825,278) - 12,960,562 907,239 3,637,522

Total 34,721,701 (15,762,113) - 18,959,588 2,481,983 7,295,686

b. Bank’s deferred tax liabilities **

Securities Available for Sale 2,679,885 - 191,830 2,871,715 753,825 701,762

Total 2,679,885 - 191,830 2,871,715 753,825 701,762

* The deferred tax liabilities include an amount of JD (2,481,983) as of December 31, 2009 compared to JD (7,295,686) as of December 31, 2008 resulting from the profits of valuating financial and nonfinancial assets stated in the fair value reserve of the holders of unrestricted investment accounts.

** The deferred tax liabilities include an amount of JD (753,825) as of December 31, 2009 compared to JD (701,762) as of December 31, 2008 resulting from the profits of valuating financial and nonfinancial assets which stated in the fair value reserve of equity.

96

Transactions in the account of deferred tax liabilities are as follows:A. Joint

2009 2008

JD JD


Deleted (4,813,703) (1,097,382)

Total 2,481,983 7,295,686

B. Self-Constructed

2009 2008

JD JD

Year-Beginning Balance 701,762 640,265

Added 52,063 61,497

Total 753,825 701,762

C. Summary of the Accounting Profit Reconciliation with the Tax Profit

2009 2008

JD JD

Accounting Profit 38,915,617 50,060,912

Taxably Unacceptable Expenses 1,378,416 5,340,204

Non-Taxable Profits (8,409,902) (11,903,440)

Taxable Profit 31,884,131 43,497,676

Attributable to:

The Bank 30,556,387 40,458,500

Subsidiaries 1,327,744 3,039,176

legal Income Tax Rate- the Bank 35% 35%

legal Income Tax Rate - Subsidiaries 25% 25%

97

(24) Other Liabilities Details of this item are as follows:

2009 2008

JD JD

Acceptable Checks 2,706,544 2,405,740

Revenues received in advance 136,011 1,035,365

Good Loans (Al Qard Al Hassan) Fund 616,490 474,339

Accrued Unpaid Expenses - 33,723

Temporary Trusts 558,684 452,132

Various Credit Balances 1,763,066 647,597

Checks for Notes Payment 2,078,089 1,689,845

Scientific Research Provision 386,069 485,028

University Tuition 386,069 485,028

Employment, Technical and Vocational Training and Education Fund 240,432 300,867

Transactions in transit between the Head Office and branches 1,231,627 3,356,087

Manager’s Checks 1,450,996 -

Others 681,722 678,453

Total 12,235,799 12,044,204

(25) Unrestricted Investment AccountsDetails of this item are as follows:

2009

IndividualsMajor

Companies

Small and Medium

Enterprises


Sector Banks Total

JD JD JD JD JD JD

Saving Accounts 273,590,446 4,221,902 1,507,848 6,994 202,746 279,529,936

Notice Accounts 12,305,073 2,500,000 30,848 6,910,377 - 21,746,298

Time Accounts 870,214,169 16,971,989 60,188,510 6,208,375 - 953,583,043

Total 1,156,109,688 23,693,891 61,727,206 13,125,746 202,746 1,254,859,277

Depositors’ Share inInvestment Returns

37,617,340 770,949 2,008,471 427,084 1,336 40,825,180

Total UnrestrictedInvestment Accounts

1,193,727,028 24,464,840 63,735,677 13,552,830 204,082 1,295,684,457

2008

IndividualsMajor

Companies

Small and Medium

Enterprises


Sector Banks Total

JD JD JD JD JD JD

Saving Accounts 220,364,926 441,395 3,461,932 3,984 912,595 225,184,832

Notice Accounts 16,459,892 - 31,099 6,766,578 - 23,257,569

Time Accounts 719,134,736 3,764,256 13,267,244 7,979,932 - 744,146,168

Total 955,959,554 4,205,651 16,760,275 14,750,494 912,595 992,588,569

Depositors’ Share inInvestment Returns

32,935,716 144,018 373,936 505,113 1,158 33,959,941

Total UnrestrictedInvestment Accounts

988,895,270 4,349,669 17,134,211 15,255,607 913,753 1,026,548,510

98

The unrestricted investment accounts share in the profits according to the following bases:- 50% of the annual rate of saving accounts balance.- 70% of the annual rate of notice accounts balance.- 90% of the minimum balance of time accounts.The unrestricted investment accounts (public sector) inside the Kingdom amounted to JD (13,552,830) i.e. 1,05% of the total unrestricted investment accounts as of December 31, 2009 compared to JD (15,255,607) i.e. 1,49% as of December 31, 2008.

(25 A) Reserve of Investment Accounts Holders and Non Controlling Interests– SubsidiariesDetails of this item are as follows:

Joint

2009 2008

JD JD

Reserve of Investment Accounts Holders– Subsidiaries 3,666,356 1,815,396

Non-Controlling Interests 599,661 573,896

(26) Fair Value ReserveThe Details of this item are as follows:

Joint Self-Constructed

2009 2008 2009 2008

JD JD JD JD

Financial assets available for sale 4,424,282 10,277,697 2,117,890 1,978,123

Real Estate Investments 12,053,323 17,148,318 - -

Total 16,477,605 27,426,015 2,117,890 1,978,123

The transactions in the fair value reserve are as follows:A. Fair Value Reserve/ within unrestricted investment accounts holders` equity:

2009

Financial Assets Available for

Sale

Real Estate Investments

Total

JD JD JD

Year-Beginning Balance 13,935,861 20,785,840 34,721,701

Unrealized Losses (19,634) (6,502,863) (6,522,497)

Deferred Tax Liabilities (1,574,744) (907,239) (2,481,983)

Profits Transferred to the Income Statement (7,917,201) (1,322,415) (9,239,616)

Year-End Balance 4,424,282 12,053,323 16,477,605

2008

Financial assets Available for

Sale

Real Estate Investments

Total

JD JD JD

Year-Beginning Balance 11,461,435 12,019,197 23,480,632

Unrealized Profits 21,872,366 9,160,538 31,032,904

Deferred Tax Liabilities (3,658,164) (3,637,522) (7,295,686)

Profits Transferred to the Income Statement (19,397,940) (393,895) (19,791,835)

Year-End Balance 10,277,697 17,148,318 27,426,015

99

B. Fair Value Reserve/within equity

2009 2008

Financial assets

available for sale

Financial assets

available for sale

JD JD


Unrealized Profits 191,830 881,045

Deferred Tax Liabilities (753,825) (701,762)

Year-End Balance 2,117,890 1,978,123

(27) Investment Risk Fund:a. The transaction in the Investment Risk Fund is as follows:

2009 2008

JD JD


Add: investment profits transferred this year 9,982,280 10,175,051

Net Tax Settlement 17,328 -

Recovered amounts from previous years losses 48,422 75,293

Less: losses amortized during the year* (4,323,065) (1,913,155)

Income Tax** (2,165,825) (2,730,314)

Year-End Balance 41,015,908 37,456,768

The balance of Investment Risk Fund is distributed as follows:

2009 2008

JD JD

For deferred sale receivables 20,095,896 14,429,691

For finances 186,678 149,706

Remaining Balance*** 20,733,334 22,877,371

A rate of 10% was deducted from the net investment profits realized from different transactions on December 31, 2009. The amount was transferred to the Investment Risk Fund.The balance of the Investment Risk Fund devolves to the Zakat Fund in case of the Bank’s liquidation.

* The losses charged to the Fund represent the losses realized from selling stocks at the sum of JD (2,050,825), losses amortization of a subsidiary at JD(2,213,457) and (Losses) of debt amortization of deferred sale receivables at JD (58,783) in accordance with the provisions of Article (55) of the Banks Law and the Interpretation issued by the Bureau of Laws Interpretation.

** The above item of Fund income tax represents the following:

100

2009 2008

JD JD

Income tax payable on the amounts transferred from joint investment profits 2,165,825 2,730,314

Total Payable Tax 2,165,825 2,730,314

*** The remaining balance (undistributed portion) is attributed to the Joint Investment Accounts.

The taxes payable on the Fund for 2008 were settled, and the income tax on the Investment Risk Fund for 2009 will be paid from the Fund’s balance itself when it is finally estimated at the end of the year according to the related Sharia fatwa.

28. Capital:The subscribed and paid-up capital amounted to JD (100,000,000) on December 31, 2009 distributed on (100,000,000) shares. The face value per share is One JD. The subscribed and paid-up capital amounted to JD (81,250,000) on December 31, 2008 distributed on (81,250,000) shares, with a face value per share at One JD. In its extraordinary meeting held on 27 July 2009, the General Assembly agreed to increase the Bank’s capital to JD (100,000,000) divided into (100,000,000) shares as follows:

-To increase the capital by an amount of JD (8,750,000)/Share– of retained earnings.-To increase the capital by an amount of JD (10,000,000)/Share – of voluntary reserve.

29. Reserves:Statutory Reserve:The accumulated amounts in this account represent the annual pre-tax profits transferred at (10%) during the year and previous years in accordance with the Banks Law. Such reserve is non distributable to shareholders.

Voluntary Reserve:The accumulated amounts in this account represent the annual pre-tax profits transferred at (20%) during the year and previous years. The voluntary reserve is used for the purposes determined by the Board of Directors and the General Assembly has the right to distribute all or part of it as dividends.

Special Reserve:The accumulated amounts in this account represent the annual profits transferred to discharge any obligations due on the Bank, and they are distributable to shareholders.

General Banking Risks Reserve:This item represents general banking risks reserve on the deferred sale receivables as well as the Bank’s finances funded by the Bank own funds according to the instructions of the Central Bank of Jordan.

The restricted reserves are as follows:

JD Nature of Restriction

Statutory Reserve 26,409,498 Pursuant to the Banks Law

General Banking Risks Reserve 700,000 As per the Instructions of the Central Bank

101

30. Retained Earnings:Details of this item are as follows:

2009 2008

JD JD


Net Profits after Tax for the Year 27,888,946 35,140,643

Statutory Reserve (4,000,819) (5,141,183)

Voluntary Reserve (3,860,686) (4,850,276)

General Banking Risk Reserve (100,000) (213,681)

Dividends (12,187,500) (7,800,000)

Transferred to Increase Capital (8,750,000) (1,250,000)

Year-End Balance 38,668,837 39,678,896

Proposed Dividends:The rate of dividends proposed to be distributed to shareholders for the current year amounted to 12% of the capital. This rate is subject to the approval of the General Assembly of Shareholders. The rate of dividends distributed to shareholders last year amounted to 15% of the capital, in addition to bonus stock at 23, 08% of the capital.

31. Deferred Sales Revenues:The details of this item are as follows:

Joint

2009 2008

JD JD


Murabaha to purchase-orderer 27,875,946 24,060,332

Forward Sale 51,412 68,766

Real Estate Finances 18,138,338 12,476,577

Major Companies

International Murabaha 283,041 7,619,037


Small and Medium Enterprises


Total 72,885,760 63,987,719

32. Finance Revenues:The details of this item are as follows:

Total Self-Constructed Joint

200820092008200920082009

JDJDJDJDJDJD


305,140288,15940,48321,379264,657266,780Diminishing Musharaka

305,140288,15940,48321,379264,657266,780Total

102

33. Profits of Financial Assets Held for Trading:The details of this item are as follows:

Self-Constructed Joint

2008200920082009

JDJDJDJD

Realized Profits

52,252319455,041-Companies Shares

52,252319455,041-Total

34. Profits of Financial Assets Available for Sale:The details of this item are as follows:

Self-Constructed Joint

2008200920082009

JDJDJDJD

191,728402,4551,021,229816,978Returns of Company Stock Distributions

--19,397,9407,917,201Sales Profits of Financial Assets Available for Sale

--344,68376,254Islamic Banks Portfolio Revenues

--4,908,0292,284,448Muqarada Bonds Revenues

191,728402,45525,671,88111,094,881Total

35. Revenues of Financial Assets Held to Maturity:The details of this item are as follows:

Joint

20082009

JDJD

61,989170,280Islamic Leasing Sukuk

215,333121,335Investment Funds

277,322291,615Total

36. Dividends Distributed by Affiliates and Subsidiaries:The details of this item are as follows:

DividendsDistribution RateOwnership Rate

20082009Joint

JDJD٪٪Subsidiaries:

90,00090,00010.090.0AlRezq Trading Co.

95,00095,00010.095.0AlSamaha Real Estate Co.

Affiliates

67,48077,1208,028.4Jordanian Center for International Trading Co

288,000805,36125,029,7AlAmin Investment Co.

-529,50015,033,2Islamic Insurance Co.

198,000330,00025,026,0Arabian Steel Pipes Mfg. Co.

738,4801,926,981Total

103

37. Real Estate Investment Revenues:The details of this item are as follows:

Joint

20082009

JD JD

1,252,5241,322,415Realized Profits of Real Estate Investment Held for Capital Appreciation

-242,340Realized Profits of Real Estate Investment Held to Earn Periodic Rentals

1,252,5241,564,755Total

38. Revenues of Leased Assets and Ijarah Muntahia BittamleekThe details of this item are as follows:

Joint

20082009

JD JD

6,951,35210,390,060Ijarah Muntahia Bittamleek

6,951,35210,390,060Total

39. Revenues of Other Investments The details of this item are as follows:

2009 2008

JD JD

Revenues of Investment Deposits at Islamic Financial Institutions 1,401,964 2,151,528

Total 1,401,964 2,151,528

40. Net Results of Subsidiaries The details of this item are as follows:

2009 2008

JD JD

Revenues

School installments and transportation 4,378,989 3,861,977

Profits of financial assets 64,315 34,592

Muqarada Bonds Revenues 91,815 184,989

Projects Revenue 159,861 316,707

Other Revenues 161,592 380,436

Total Revenues 4,856,572 4,778,701

Expenses

Administrative Expenses (3,619,731) (3,507,364)

Depreciations (337,888) (267,044)

Impairment of PC Software (309,685) (309,685)

Other expenses (248,264) (151,985)

Total expenses (4,515,568) (4,236,078)

Net results 341,004 542,623

104

41. Revenues of Unrestricted Investment Accounts Holders:The details of this item are as follows:

20082009

JDJD

1,1581,336Banks and Institutions

Clients:

4,464,1795,628,143Saving Accounts

819,583730,544Notice Accounts

28,675,02134,465,157Time Accounts

33,959,94140,825,180Total

42. The Banks’ Share of the Revenues of Unrestricted Investment Accounts as a Speculator and Capital Owner:

The details of this item are as follows:

20082009

JDJD

30,525,15129,946,839As a Speculator

27,090,36119,068,497As a Capital Owner

57,615,51249,015,336Total

43.Profits of Bank’s Self-Investment:The details of this item are as follows:

20082009

JDJD

40,48321,379Finance Revenues (Note 32)

191,728402,455Profits of Financial Assets Available for Sale (Note 34)

232,211423,834Total

44. The Bank’s Share of the Restricted Investment Revenues as Speculator and/or Agent:The details of this item are as follows:

20082009

As SpeculatorAs AgentAs SpeculatorAs Agent

JDJDJDJD

3,175,56847,250646,11347,250Restricted Investment Revenues

(2,735,212)-(529,818)-Less: Share of Restricted investment accounts Holders

440,35647,250116,29547,250Net

25,357,189-12,161,339-Muqarada Bonds Profits

(17,222,004)-(9,028,199)-Less: Share of Muqarada Bonds holders

8,135,185-3,133,140-Net

8,575,54147,2503,249,43547,250Total

105

45. Banking Service Revenues:The details of this item are as follows:

20082009

JDJD

1,152,636940,004Documentary Credit Commissions

1,412,9501,484,430Guarantee Commissions

210,133245,475Collection Policies Commissions

437,421544,186Transfers Commissions

2,414,7152,662,890Salary Transfer Commissions

508,512595,272Bounced Checks Commissions

1,056,0691,198,236Account Management Commissions

4,094,4272,143,953Brokerage Commissions

617,154741,758Other Commissions

11,904,01710,556,204Total

46.Foreign Currency Profits:The details of this item are as follows:

Self-Constructed

20082009

JDJD

808,463655,462Resulting from Trading

1,096,087989,390Resulting from Valuation

1,904,5501,644,852Total

47. Other Revenues:The details of this item are as follows:

20082009

JDJD

91,756103,056Received rentals

356,149376,873Post, Mail and Telephone

71,92284,952Safe box leasing

1,265,6541,582,846Credit Card Commissions

1,355,281824,362Other Revenues

3,140,7622,972,089Total

106

48. Employee ExpensesThe details of this item are as follows:

20082009

JDJD

13,709,78515,345,679Employee Salaries, Benefits and Remunerations

1,243,4461,318,460Bank’s Contribution to Social Security

1,257,7231,359,379Medical Expenses

134,069113,049Employee Training Expenses

112,595116,628Employee Allowances

145,563152,190Employee Meals Provision

16,603,18118,405,385Total

49. Other ExpensesThe details of this item are as follows:

20082009

JDJD

736,108879,327Post, mail, telephone and telex

1,070,8401,267,745Stationery, publications and supplies

314,392443,377Credit cards

666,567735,856Paid rentals

652,261702,215Water, electricity and heating

843,032951,741Maintenance, repairs and cleaning

240,357250,497Insurance installments

490,861489,888Travel and transportation expenses

96,793114,643Legal fees and consultations

87,520103,520Auditing Fees

322,056286,471Subscriptions and memberships

340,859270,090Donations

1,691,781601,825Charges, licenses and taxes

123,875174,867Hospitality and tips

612,5101,088,342Promotion and Advertising

252,500156,785Marketing expenses

150,509149,745Saving accounts rewards

13,52021,200Board committees Remunerations

122,45397,314Visa accounts rewards

485,028386,069Jordanian Universities Charges

485,028386,069Scientific Research and Vocational Training

80,00080,000Board Members Remunerations

300,867240,432Employment and Technological and Vocational Training and Education Fund

125,51358,298Investor Protection Fund

439,37060,630Doubtful debts

423,42797,409Others

11,168,02710,094,355Total

107

50. Miscellaneous Provisions The details of this item are as follows

20082009

JDJD

442,845183,328Resignation Provision (Note 21)

208,000127,000Employee Leaves Provision ( Note 21)

650,845310,328Total

51. Earnings per ShareThe details of this item are as follows:

20082009

35,140,64327,888,946Profit for the Year (JD)

100,000,000100,000,000Weighted Average Number of Stocks (Stock)

0,3510,279Basic Earnings per Share

The diluted earnings per share are equal to the basic earnings per share.

52. Cash and Cash EquivalentThe details of this item are as follows:

20082009

JDJD

577,031,989771,251,223Cash and balances with Central Banks that are due within Three Months

103,138,295101,622,408Add: balances with Banks and Banking Institutions that are due within Three Months

(8,525,718)(5,197,630)Less: Accounts with Banks and Banking Institutions that are due within Three Months

671,644,566867,676,001Total

108

53.

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101,

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197,

226,

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--

--

--

--

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Inve

stmen

t Uni

ts

at Y

ear-B

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189,

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110,

120,

389

2,65

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1,69

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(250

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--

9,35

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(328

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388,

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394,

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--

--

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Num

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197,

226,

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--

--

--

--

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f In

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683,

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--

--

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--

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--

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--

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110

55. Investment by Proxy Accounts:The details of this item are as follows:

20082009

JDJD

9,445,7509,451,500Investment by Proxy Accounts

9,445,7509,451,500Total

The investment by proxy accounts represent cash amounts deposited at the Bank which manages and invests them according to the investment modes (compliant with the principles of Islamic Sharia) it deems appropriate and as agreed upon with the depositor in return for a lump sum or a ratio of the invested funds on the basis of commission agency contract. In case of any losses, the depositor shall incur them unless arising from the Bank’s negligence or violation. The Bank’s fees reached 1.5% of the invested capital, of which 1% is to be paid for once and 0.5% is to be paid annually as reservation fees.

56. Transactions with related Parties:a. The consolidated financial statements include the financial statements of the Bank and the following subsidiaries:

Company’s CapitalOwnership RateCompany

20082009

1,000,0001,000,00090%Al Rizq Trading Company Ltd.

4,500,0004,500,00094.8٪Omariah Schools Company Ltd.

1,000,0001,000,000100٪AlSamaha Real Estate Company Ltd.

4,000,0005,000,000100٪Future Applied Computer Technology Company Ltd

5,000,0005,000,000100٪Sanabel Al-Khair for Financial Investments

The Bank entered into transactions with the parent company, affiliates, senior shareholders, Board members and senior management within the ordinary activities of the Bank using Murabaha ratios and commercial commissions. All deferred sale receivables and finances granted to related parties are considered operational and no provisions were allocated for them.

111

b. Below is a summary of transactions with related parties during the year:

TotalRelated Parties

20082009

Board Members

and SeniorManagement

SubsidiariesAffiliatesParent

JDJDJDJDJDJD

Items within the Statement of Financial Position

2,388,2141,493,144141,878-1,351,266-Deferred Sale Receivables

332,659284,659-284,659--Musharaka Financing

356,272300,970300,970---Financing of Employee Residence /Musharaka

36,029,21922,190,7871,720,75310,659,9439,806,6903,401Deposits

Items beyond the Statement of Financial Position

1,085,6051,009,000-1,000,0009,000-Guarantees

Items of Consolidated Income Statement

189,817166,1592,68255,840107,637-Received Revenues

859,876174,77410,998110,80152,975-Paid Profits

C. Following is the summary of the Bank’s Senior Executive Management Benefits (Salaries, Rewards and other Benefits):

20082009

JDJD

1,213,0701,506,711Salaries, Remunerations and Transportation

1,213,0701,506,711Total

57. Fair Value of Financial InstrumentsThe Bank uses the following order of valuation methods and alternatives to determine and present fair value of financial instruments:First Level:

market prices quoted in effective markets for the same assets and liabilities. Second Level:

Other techniques where all inputs with significant impact on the fair value is directly or indirectly observable from market information.

Third Level:Other techniques where inputs with significant impact on the fair value are used but not based on observable market information.

The following table shows the analysis of financial instruments carried at fair value according to the above hierarchical order:

December 31, 2009 First Level Second Level Third Level Total

Financial Assets JD JD JD JD

Financial Assets Available for Sale 34,838,390 - - 34,838,390

112

December 31, 2008 First Level Second Level Third Level Total

Financial Assets JD JD JD JD

Financial Assets Available for Sale 29,415,822 - - 29,415,822

58. Fair Value of Financial Assets and Liabilities not Stated at Fair Value in the Financial Statements.As shown in note 8, the financial assets available for sale include the financial assets not listed in the financial markets at an amount of JD (63,620,749) that are carried at cost because the Bank’s was unable to estimate their fair value.

59. Risk ManagementThe Bank manages its different banking risks through following comprehensive measures of risk management, including the proper control by the Board of Directors and the senior Management, in order to determine, measure, follow-up, control and report relevant categories of risks, and to maintain an adequate capital to face such risks. These measures take into consideration the appropriate steps to comply with the Sharia principles.The Bank’s organizational structures complement each other in risk management, each according to its competences. This helps in developing and controlling policies and regulations at an appropriate level for each type of risk the Bank faces with a view to realizing the acceptable level of returns to shareholders without compromising the financial solvency of the Bank. In this framework, the work of the Risk Management Department at the Bank complements with the committees emanating from the Board of Directors and the Executive Management (Risk Management Committee and Assets and Liabilities Management Committee).

Qualitative and Quantitative Disclosures:

1- Credit Risk and Concentration in Assets and Liabilities:

The daily practice of banking activities involves the Bank’s exposure to many risks including the credit risk resulting from the other party’s default or failure to fulfill its obligations towards the Bank, which consequently results in losses. On its part, the Bank ensures that these risks do not surpass the already specified general framework in the Bank’s credit policy and seeks to maintain their levels within the balanced relationship between risks, returns and liquidity.In addition to the Risk Management Department, a number of committees in the Board of Directors and Executive Management manage the credit risks at the Bank associated, by determining the ceilings of credit facilities that can be granted to a single client (individual or institution) and relevant accounts in consistence with the instructions issued by the Central Bank of Jordan. The Bank controls the credit risks through assessing the credit position of clients on a periodic basis according to the Clients Risk Assessment System at the Bank, which is based on the assessment of credit risk elements and default possibilities for administrative, financial or competitive reasons. Furthermore, the Bank receives proper assurances from clients in the necessary cases and according to the risk levels of each client and each process of granting additional facilities.The Bank’s policy of credit risks management comprises the following:

1. An available clear credit and investment policy and strategy approved by the Board of Directors.

2. Identifying the credit concentrations and ceilings:The credit policy includes specific and clear rates of the maximum limit of credit that can be granted to any client. Moreover, there are ceilings for the credit that can be granted by each administrative level.

113

3. Identifying Methods of Risk Mitigation:The risk management process in the Bank depends on a number of methods to mitigate risks, including:

-Distributing and diversifying credit investments to various sectors and geographical locations.

- The availability of clear credit and investment ceilings those are consistent with the instructions of the Central Bank of Jordan for each type of investment.

- Guarantees based on their liquidity and their coverage of the granted credit.- The authorities of approving credits differ from an administrative level to the other and

depend on the financing volume and the degree of risk.4. Restricting the Risks of Assets and Liabilities Concentration:

The Bank operates effectively to mange this aspect of risks. The annual plan of the Bank involves a targeted distribution of credits to a number of sectors while concentrating on the promising sectors at the same time. Further, the plan also consists of distributing credits to the geographical areas inside the Kingdom.

5. Studying, Monitoring and Following- up Credit:The Bank develops the required procedures and policies to determine the method of reviewing credits and maintaining the impartiality and integration of the decision making process, ensuring that the credit risks are accurately assessed, properly approved, continually followed-up, and continually monitored.The general framework of the credit policy involves the authorities of approving credits, clarifying the credit limits and the method of specifying the degree of risk.

Within the organizational structure of the bank, there is a segregation of the business units in charge for granting credits and those in charge for overseeing credit in terms of granting terms, the soundness of the credit decision, ensuring that all terms of granting the credit are fulfilled, committing by the limits and restrictions mentioned in the credit policy in addition to other relevant instructions.

114

1-Exposure to Credit Risks (after the impairment provision and before guarantees and other risk mitigants)

Joint Self-Constructed

2009 2008 2009 2008

JD JD JD JD

Items within the Statement of Financial Position

Balances with Central Banks 771,251,223 577,031,989 - -

Balances with Banks and Banking Institutions 101,622,408 103,138,295 - -

Investment Accounts with Banks andBanking Institutions 4,608,500 9,320,403 - -

Deferred Sales and Other Receivables

Individuals 323,647,894 340,057,029 4,932,991 1,893,757

Real Estate Finances 202,211,994 175,269,228 - -

Companies:

Major Companies 265,180,586 221,649,930 - -

Small and Medium Enterprises (SMEs) 117,132,856 67,352,528 - -

Finances

Musharakah

Individuals 14,441,567 13,796,636 528,387 543,679

Items beyond the Statement of Financial Position

Guarantees 76,855,724 76,691,824 - -

Credits 37,367,029 29,369,419 -

Acceptances 5,652,313 5,601,493 - -

Unutilized Limits 67,512,627 67,504,918 - -

Total 1,987,484,721 1,686,783,692 5,461,378 2,437,436

Guarantees and Other Credit Risk Mitigants against Credit Exposures:The quantity and quality of required guarantees depend on the credit risk assessment of the counterparty. It is also possible to adjust or reduce the volume of risk exposure related to the debtor, concerned party or any other obligor using the methods of credit risk mitigation applicable in the Islamic banks. These include (asset mortgage, third party guarantee, earnest money, cash margin, stock mortgage).

As for the types of credit exposures mentioned in the table above, they are as follows:- Cash Margins. - Accepted Bank Guarantees.- Real Estate Guarantees - Vehicles and Machinery mortgage.

2. The Credit Exposure of Deferred Sales and other Receivable and Finances are distributed according to the

115

risk

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ree

as in

the

follo

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g ta

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JD

2009

-

--

--

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2,13

6,36

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3,26

310

1,62

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4,75

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--

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239,

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l

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.

116

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-con

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Join

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and

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JDJD

JDJD

JDJD

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2008

-

--

--

--

605,

508,

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162,

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529

Rea

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5,96

1,37

8-

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5,96

1,37

830

0,27

5,03

621

,948

,369

7,54

0,42

310

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,161

260,

173,

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,993

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2,87

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2,87

6,80

677

5,76

0,62

459

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205,

504,

877

176,

053,

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334,

967,

591

Acc

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--

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-25

,701

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2,24

6,54

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6,99

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675,

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2,07

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--

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-8,

550,

953

1,26

6,69

91,

794,

975

1,18

7,38

44,

301,

895

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--

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-12

,432

,552

1,27

6,53

594

3,82

13,

740,

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6,47

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2,87

6,80

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2,87

6,80

685

4,77

2,50

965

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,349

225,

558,

816

188,

648,

566

375,

445,

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--

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-17

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1,35

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0,12

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118

The scheduled deferred sales receivables and other receivables and financings:These are those receivables which have already been classified as non-operating receivables/Finances and were set aside in terms of the non-operating receivables and finances in accordance with a legal scheduling under monitoring and were classified as receivables/ finances under monitoring which amounted to JD (11,697,268) on December 31,2009 against JD (7,598,493) on December 31,2008.

The restructured deferred sales and other receivables and finances:Restructuring means rearranging the statues of receivables/ financings in terms of amending the installments or extending the span of receivables/ finances, deferring some installments or extending the grace period, etc. and reclassifying them as receivables/ finances under monitoring. The total amount of these receivables/ finances was JD (19,824,263) as on December 31, 2009. Taking in consideration that there are no restructured receivables and they were reclassified as receivables/finances under monitoring as of December 31, 2008.

Sukuk:The following table explains the Sukuk ratings within the financial assets held to maturity date in relation with external rating standards:

20082009Rating

InstitutionRating

JDJD

3,545,0005,317,500S&PA

3,545,0005,317,500Total

3- Concentration in credit exposures according to geographical distribution is as follows:

Inside the Kingdom

Other Middle East Countries

Europe Asia* America Total

JD JD JD JD JD JD

Accounts Balances at CentralBanks

771,251,223 - - 771,251,223

Account Balances at Banksand Banking Institutions

15,400,279 42,426,130 24,356,344 733,699 18,705,956 101,622,408

Joint Investment Accounts at Banks and Banking Institutions

- 4,608,500 - - - 4,608,500

Deferred Sales and otherReceivables and Finances

- - - - - -

Individuals 329,109,272 - - - - 329,109,272

Real Estate Finances 216,653,561 - - - - 216,653,561

Enterprises - - - - -

Major Companies 218,040,489 41,411,331 5,728,766 - - 265,180,586

Small and MediumEnterprises (SMEs)

117,132,856 - - - - 117,132,856

Sukuk:

Within the financial assetsheld to maturity

- 5,317,500 - - - 5,317,500

Total as on December 31, 2009 1,667,587,680 93,763,461 30,085,110 733,699 18,705,956 1,810,875,906

Total as on December 31, 2008 1,408,219,850 54,939,420 18,456,567 383,911 31,598,726 1,513,598,474

*Except the Middle East countries

119

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2,62

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80,9

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7,57

8,35

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1,25

1,22

31,

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875,

906

Tota

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2008

117,

897,

455

53,4

40,2

7342

5,00

4,91

517

5,26

9,22

812

,535

,190

-15

2,41

9,42

457

7,03

1,98

91,

513,

598,

474

120

2. Liquidity Risks

The liquidity risks consist in the bank`s inability to afford the required financing to fulfill its obligations on their maturity dates. To manage such risks, the Bank shall:

1. Analyze liquidity (maturity gaps) 2. Maintain a reasonable percentage of liquidity to face issued cash flows.3. Diversify sources of financing.4. A committee is available to manage assets and liabilities.5. Distribute finances on different sectors and geographical areas to minimize the risks of concentration.6. Liquidity is measured, monitored and managed on the basis of the natural and contingent circumstances. This includes using and analyzing the maturity dates of assets and the different financial rations.

First:The below table summarizes the distribution of (not discounted) liabilities on the basis of the remaining period of contractual maturity on the date of financial statements:

Item Less than

month 1 to 3 months 3 to 6 months

6 months till one year

1 to 3 yearsMore than 3

yearsWithout maturity

Total

JD JD JD JD JD JD JD JD

2009-

Liabilities

Accounts of Banksand BankingInstitutions

5,197,630 - - - - - - 5,197,630

Client’s CurrentAccounts

214,563,000 87,383,921 69,218,310 51,052,699 172,952,543 - - 595,170,473

Other Provisions - - - - - - 3,786,312 3,786,312

Income Tax Provision 13,115,985 - - - - - - 13,115,985

Deferred Tax liabilities - - - - - - 753,825 753,825

Other liabilities 3,756,828 11,965,859 - 32,842,035 599,661 - 20,733,334 69,897,717UnrestrictedInvestment Accounts

177,499,964 107,963,087 128,843,151 169,229,803 715,814,808 - 18,959,588 1,318,310,401

Total 414,133,407 207,312,867 198,061,461 253,124,537 889,367,012 - 44,233,059 2,006,232,343

Total Assets (according to theirExpected Maturity Date)

975,164,171 69,014,201 58,013,928 87,496,417 199,331,897 734,728,522 59,313,804 2,183,062,940

2008-

Liabilities

Accounts of Banks and BankingInstitutions

8,525,718 - - - - - - 8,525,718

Client’s CurrentAccounts

187,575,099 76,303,042 60,340,178 197,973,707 - - - 522,192,026

Other Provisions - - - - - - 3,659,312 3,659,312

Income Tax Provision 16,125,462 - - - - - - 16,125,462

Deferred Tax liabilities - - - - - - 701,762 701,762

Other liabilities 5,851,798 10,763,667 - 33,027,075 - - 22,877,371 72,519,911

Unrestricted Investment Accounts 179,117,385 247,065,847 159,188,355 441,176,923 - - 37,110,993 1,063,659,503

Total 397,195,462 334,132,556 219,528,533 672,177,705 - - 64,349,438 1,687,383,694

Total Assets (according to theirExpected Maturity Date)

760,160,660 151,641,075 142,340,895 190,197,709 302,016,370 211,411,459 90,604,910 1,848,373,078

121

Second: Items beyond the Financial Position Statement

2009

Till one year One to five yearsMore than five

years Total

JD JD JD JD

Credits and Acceptances 43,019,342 - - 43,019,342

Unutilized Ceilings 67,512,627 - - 67,512,627

Guarantees 76,855,724 - - 76,855,724

Total 187,387,693 - - 187,387,693

2008

Till one year One to five yearsMore than five

years Total

JD JD JD JD

Credits and Acceptances 34,970,912 - - 34,970,912

Unutilized Ceilings 67,504,918 - - 67,504,918

Guarantees 76,691,824 - - 76,691,824

Total 179,167,654 - - 179,167,654

3. Market Risks:

The market risks result from fluctuations in the value of marketable assets or renting, exchange rates, stocks rates, commodity rates and leased assets. The Bank works to mitigate these risks through:

1. Diversifying investments and distributing them on a number of sectors and geographical areas.2. Studying the orientation of future investment rates, exchange rates and investment in light of such

studies.3. Setting limits to investments on the level of the country, currency, market, instrument and the

other party.4. Examining the credit position of the other party before starting an investment.5. Adapting the currency positions with the instructions of the Central Bank.

The bank uses sensitivity analysis to measure the market risks for each type of market risks (returns Rates Risks, Foreign Currency Risks, Risks of Stock Rates Change and of Concentration ofCurrency Rates Risks) A number of indicators were used to determine the impact of the income sensitivity to change in the non-trading financial assets, retained financial liabilities, the sensitivity of ownership equities and the investment accounts holders to the change in the steady state of the financial assets available for sale financed by the joint funds. Also, the bank relied on a number of assumptions related to the change of Murabaha rates, Amman Stock Exchange indexes and the currency rates, etc.

A. Rate of Return RisksThe average returns risks are induced by the overall risks included in the lists of the financial position. Any rise in the comparative standard rates may lead to the investment accounts holders expectation of a higher return rate. The return rate risks differ from the interest rates risks in that the companies are interested in the results of their investment activities by the end of the investment term and these results cannot be accurately predetermined.

122

The bank is exposed to the returns rate risks as a result of a gap in the amounts of assets and liabilities according to the different maturity dates or the re-pricing of the return rates accrued to subsequent transactions within a specific period of time. The bank manages these risks by specifying the future rates of profits according to market expectations and developing new instruments that comply with the Islamic Sharia through the risk management strategy at the bank.

The bank manages these risks through:1. Managing the gaps of return rates and cost of assets and liabilities according to the different

maturity dates.2. Studying the orientation of investment rates and the future exchange rates and investments in light

of this study.

2009

Change (Increase)in Rate of Return

(1%)

Rate of ReturnSensitivity

(Profits & Losses)

Ownership EquitiesSensitivity

InvestmentAccounts

Holders EquitiesSensitivity

JD JD JD JD

JD 1,875,139 - 1,046,444 828,695

2009

Change (decrease)in Rate of Return

(1%)


(Profits & Losses)


InvestmentAccounts


JD JD JD JD

JD 1,875,139 - 1,046,444 828,695

2008

Change (Increase)in Rate of Return

(1%)


(Profits & Losses)


InvestmentAccounts


JD JD JD JD

JD 1,474,358 - 825,640 648,718

2008

Change (decrease)in Rate of Return

(1%)


(Profits & Losses)


InvestmentAccounts


JD JD JD JD

JD 1,474,358 - 825,640 648,718

123

b. Foreign Currency RisksThe foreign currency risks are risks associated with a change in the value of financial instruments as a result of a change in the foreign currency rates. The Jordanian Dinar is considered the primary currency of the bank. The foreign currencies are managed on the basis of spot trading and not forward basis so that the foreign currencies are monitored daily and the position limits of each currency. The Bank`s policy in managing foreign currencies is based on liquidating position continually and covering the required positions according to the clients` needs. The Board of Directors sets the limits for the financial position for each currency at the bank. The foreign currencies position is monitored daily and a number of strategies are followed to ensure maintaining of a foreign currency position within the approved limits.The investment policy of the bank states that the maximum limit of the foreign currencies positions shall not exceed 15% of the total shareholders` equities or 50% of the bank’s total obligations in foreign currencies - whichever is greater- (with a maximum limit of 5% of the shareholders` equities for each currency) in order to cover the clients` needs of the letters of credit, transfers and demand policies and not for speculation or trading.

2009

CurrencyChange in theExchange Rate

(5%)

Impact on Profitsand Losses

Impact onOwnership

Equities

USD 12,874,734 643,737 643,737

EURO 599,366 29,968 29,968

GBP (44,292) (2,215) (2,215)

JPY 87,269 4,363 4,363

Other Currencies 757,011 37,851 37,851

2008

CurrencyChange in theExchange Rate

(5%)

Impact on Profitsand Losses

Impact onOwnership

Equities

USD 32,942,824 1,647,141 1,647,141

EURO 417,778 20,889 20,889

GBP 17,464 873 873

JPY 100,917 5,046 5,046

Other Currencies 575,191 28,760 28,760

124

Concentration in Foreign Currency Risks:

2009 USD Euro GBP JPY Others Total

Assets:

Cash on hand & Cash atCentral Banks

39,499,903 1,629,963 614,394 - 533,433 42,277,693

Cash at Banks & BankingInstitutions

82,086,934 10,787,970 1,186,846 436,384 3,984,510 98,482,644

Deferred Sale Receivablesand other Receivables

80,050,575 13,857,108 2,280,420 - 12,381,465 108,569,568

Financial Assets Availablefor Sale

18,203,571 - - - - 18,203,571

Other Assets 12,850 - - - - 12,850

Total Assets 219,853,833 26,275,041 4,081,660 436,384 16,899,408 267,546,326

Liabilities:

Deposits in Banksand Banking Institutions

161,385,012 17,540,948 2,945,931 349,115 4,860,818 187,081,824

Cash Margins 3,556,116 1,160,050 59,787 - - 4,775,953

Unrestricted InvestmentAccounts

38,749,593 6,611,646 1,167,651 - 11,222,119 57,751,009

Other liabilities 3,288,378 363,032 (47,416) - 59,460 3,663,454

Total liabilities 206,979,099 25,675,676 4,125,953 349,115 16,142,397 253,272,240

Net Concentration in the Financial Position Statement 2009

12,874,734 599,365 (44,293) 87,269 757,011 14,274,086

Possible obligations beyond the Financial Position Statement 2009

41,155,302 - - - - 41,155,302

2008 USD Euro GBP JPY Others Total

Total Assets 172,388,641 13,220,357 1,476,970 166,472 5,861,302 193,113,742

Total Liabilities 139,445,817 12,802,579 1,459,506 65,555 5,286,111 159,059,568

Concentration in the financial position statement 2008- Net

32,942,824 417,778 17,464 100,917 575,191 34,054,174

Possible obligations beyond the Financial Position Statement 2008

33,390,404 - - - - 33,390,404

125

C. Stock Rates RisksThe stock rates risks result from a change in the fair value of investments in stocks. The bank works to manage these risks through diversifying investments in different geographical locations and economic sectors. Most stock investments owned by the bank are listed in Amman Stock Exchange.

Change in theStatement Index (5%)

Impact on Losses and Profits

Impact on EquityImpact on Investment

Account Holders Equities

JD JD JD JD

2009

Amman Stock Exchange

310,272 - 169,270 141,002

2008

Amman Stock Exchange

585,075 - 327,642 257,433

d. Commodity Risks:Commodity risks are induced by the fluctuations in the value of marketable assets or renting. They are related to the current and future fluctuations and market values of specific assets. The bank is exposed to fluctuations of purchase commodity prices that are paid in whole after signing the Salam Contracts through the takeover period and to fluctuations in the remaining value of the leased out assets as in the end of the lease term.

4. Compliance Risks

These are the legal or supervisory punishments, the material losses or reputation risks that the bank might be exposed to as a result of not complying with the laws, regulations, instructions, directives, codes of conduct and the sound banking standards and practices. Among the most serious of these risks are those associated with risks of legal and supervisory punishments, reputations risks, financial loss risks, money laundering risks as well as fraud and corruption risks. To protect the bank against such risks, the Compliance Department ensures the compliance of the bank and its policies with all laws, regulations, instructions, directives, codes of conduct and the sound banking standards and practices issued by the domestic and international supervisory bodies through setting up the developing a policy of compliance and a compliance guide as well as drawing up and developing the general policy of combating money laundering and preparing procedures and work testimonies regarding the internal and external laws, regulations and instructions and preparing a work ethics charter and organizing the required training courses.

5. Operation Risks

These are risks resulting from the failure or unsuitability of one or more of the internal procedures, human element and systems or the failure or unsuitability caused by external events. This definition encompasses the legal risks, noncompliance risks and those risks of noncompliance with the Sharia standards. The bank works to manage these risks through:

-The availability of applicable instructions and documented work procedures to be followed by the employees and help minimize the possibility of the occurrence of any operational risks.

-The bank`s preparation of a plan to ensure the continuity of work that minimizes exposure to risks the bank faces as well as the plan of recovery from the effects of losses resulting from crises.

-The Legal Department ensures the validity of the contracts and documents of the bank while the

126

follow-up department follows up the faltering under-settlement accounts and proceeding with the procedures of collecting debts.

-The Computer Department, in coordination and cooperation with the Internal and Sharia Auditing Department, sets up the required policies and procedures to protect the security and confidentiality of the information in the bank.

6-Goodwill Risks

These are risks resulting from a bad impression on the bank which may lead to the occurrence of losses in the sources of financing or may lead to clients` movement to competitive banks. This impression might be induced by the conduct of the managers or employees of the bank or as a result of not providing client services with the required quality. Moreover, it can be triggered by a weakness in the systems of confidentiality at the bank which in turn shakes the trust of clients in the bank, or because of the bank’s involvement in illegal activities like money laundering or financing unacceptable sectors.It might also develop as a result of repeated burglary crimes. The bank works to manage these risks through a number of procedures that enhance the clients` trust in the bank like providing good banking services, preserving the banking confidentiality and not practicing illegal activities or financing undesirable sectors.

60. Information on the Banks̀ Sectors:

A. Information on the bank`s activities:The bank is organized for administrative purposes through four main business sectors:

Individuals’ Accounts:These encompass follows up the unrestricted investment accounts, deferred sales receivables and other financing and banking services related to individuals.

Institutions` Accounts:These encompass follows up the unrestricted investment accounts, deferred sales receivables and other financing and banking services related to the institutions` clients.

Investment in Assets:This sector includes investing in real estate, renting.

Treasury:This sector is responsible for providing trading, budget and bank`s funds management services.

127

Below is information on the bank`s business sectors distributed according to the activities:

Total

Individuals EnterprisesInvestment in Assets

Treasury Others 2009 2008

JD JD JD JD JD JD JD

Total Returns(Joint + Self Constructed)

40,233,897 32,918,643 25,268,292 1,401,964 18,893,983 118,716,779 127,607,087

Subsidiary Net Results - 341,004 - - - 341,004 542,623

Share of the Investment Risks Fund from therevenues of Joint Investment AccountsHolders

(4,023,390) (3,291,864) (2,526,830) (140,196) - (9,982,280) (10,175,051)

Share of the UnrestrictedInvestment Accounts and Non-Controlling Interests from the Net Resultsof Subsidiary Companies

(22,453,849) (18,371,331) (275,783) - (65,221) (41,166,184) (34,502,564)

Sector Work results 13,756,658 11,596,452 22,465,679 1,261,768 18,828,762 67,909,319 83,472,095

Undistributed Expenses - - - - (28,993,702) (28,993,702) (33,411,183)

Profits before Taxes 13,756,658 11,596,452 22,465,679 1,261,768 (10,164,940) 38,915,617 50,060,912

Income Tax - - - - (11,026,671) (11,026,671) (14,920,269)

Net Profit of the Year 13,756,658 11,596,452 22,465,679 1,261,768 (21,191,611) 27,888,946 35,140,643

Other Information

Sector Assets 537,805,253 408,416,515 298,638,129 877,482,110 - 2,122,342,007 1,794,093,827

Investment in AffiliateCompanies

- - 19,837,758 - - 19,837,758 21,324,686

Assets not Distributed toSectors

- - - - 40,883,175 40,883,175 32,954,565

Total Assets 537,805,253 408,416,515 318,475,887 877,482,110 40,883,175 2,183,062,940 1,848,373,078

Sector Liabilities 1,073,698,236 881,999,282 - 5,197,630 - 1,960,895,148 1,625,180,613

Liabilities not Distributed to Sectors

- - - - 222,167,792 222,167,792 223,192,465

Total Liabilities 1,073,698,236 881,999,282 - 5,197,630 222,167,792 2,183,062,940 1,848,373,078

Capital Expenses - - - - 7,514,439 7,514,439 8,030,324

Depreciations - - - - (2,324,892) (2,324,892) (1,731,051)

128

b. Geographical Distribution Information:This sector represents the geographical distribution of the bank`s works. The bank practices its activities mainly inside the Kingdom, which forms the domestic works. Below is the distribution of the bank`s revenues and assets as well as its capital expenses according to the geographical sector:

Inside the Kingdom Outside the Kingdom Total

2009 2008 2009 2008 2009 2008

JD JD JD JD JD JD

Total Revenues 98,110,926 99,586,955 2,052,874 2,706,172 100,163,800 102,293,127

Total Assets 1,915,516,614 1,594,587,757 267,546,326 253,785,321 2,183,062,940 1,848,373,078

Capital Expenses 7,514,439 8,030,324 - - 7,514,439 8,030,324

61. Capital ManagementThe capital of the bank consists of the paid-in capital, reserves- including the statutory, voluntary, general banking risks reserves- and other reserves, and retained earnings.Pursuant to the instructions of the Central Bank of Jordan that are based on the decisions of Basel Committee, the bank has to keep an adequate capital to face the risks that are associated with its transactions which consist in the credit risks, market risks and operational risks. The capital adequacy ratio should not be less than 12% according to the established instructions.The bank determines the capital adequacy ratio according to the Islamic banks standard issued by IFSB. This ratio is not considered a requirement of the Central Bank of Jordan.The bank works to achieve the objectives of the capital through the follows:

- Realizing an acceptable return on capital without compromising the financial stability as well as realizing acceptable return on equity.

- Achieving the required level of capital in pursuance of the requirements of Basel Committee of Banking Supervision and the trends of the supervisory bodies.

- Providing an adequate capital to expand the granting of financings and large investments in consistency with the instructions of the Central Bank as well as facing any future risks.

129

The following table represents the amount the bank considers as a capital and a capital adequacy ratio according to Basel II as of December 31, 2009 and December 31, 2008:

2009 2008

JD JD

Principal Capital Items

Paid-up Capital 100,000,000 81,250,000

Statutory Reserve 26,409,498 22,408,679

Voluntary Reserve 5,922,477 12,061,791

Special Reserve 3,011,895 3,011,895

Retained earnings 26,668,837 27,491,396

50% of Investments in Bank’s Capitals and other Financial Companies (884,000) (884,000)

Intangible Assets (71,742) (416,286)

Total Principal Capital Items 161,056,965 144,923,475

Additional Capital Items

Fair Value Reserve of the Financial Assets Available for Sale 1,292,272 1,205,948

General Banking Risks Reserve 13,347,328 12,545,654

50% of Investments in Bank’s Capitals and other Financial Companies (884,001) (884,001)

Total Additional Capital Items 13,755,599 12,867,601

Total Regulatory Capital 174,812,564 157,791,076

Total Assets and risk-weighted off-balance-sheet Items 1,208,107,000 1,149,375,000

Capital Adequacy Ratio (%) 14,47٪ 13,73٪

Principal Capital Ratio (%) 13,33٪ 12,61٪

The Capital Adequacy Ratio is calculated according to the standards issued by the IFSB. This ratio is not considered a requirement of the Central Bank of Jordan and amounted to (33%) as of December 31, 2009.

62. Accounts Managed for Clients:

The Accounts managed for clients amounted to JD (288,468,890) as of December 31, 2009 compared to JD (321,964,979) as of December 31, 2008. These accounts are not shown within the bank`s liabilities in the financial statements.

130

63. Assets and Liabilities Maturity Analysis:The table below shows the analysis of assets and liabilities according to the expected period of their recovery or settlement:

Assets

2009

Till One Year More Than One Year Total

JD JD JD

Cash and account balances at central banks 771,251,223 - 771,251,223

Account balances at banks and banking institution 101,622,408 - 101,622,408Unrestricted investment accounts at banks and

banking institutions4,608,500 - 4,608,500

Deferred Sales and other receivables –net 384,787,625 528,318,696 913,106,321

Finances –Net 2,288,192 12,681,762 14,969,954

Financial Assets Available for sale 98,459,139 - 98,459,139

Assets held to maturity - Net - 14,459,571 14,459,571

Investments in affiliate and subsidiary companies - 19,837,758 19,837,758

Ijara Muntahia Bittamleek Assets –Net 14,225,854 120,725,588 134,951,442

Real Estate Investments - 62,008,391 62,008,391

Good Loans-Net 2,650,091 5,994,197 8,644,288

Property and Equipment –Net - 32,710,381 32,710,381

Intangible Assets - 71,742 71,742

Other Assets 5,182,192 1,179,630 6,361,822

Total Assets 1,385,075,224 797,987,716 2,183,062,940Liabilities and Unrestricted Investment Accounts Holders’ EquitiesLiabilities

Banks and Banking Institutions Accounts 5,197,630 - 5,197,630

Clients’ current and call accounts - Trust 422,217,929 172,952,544 595,170,473

Cash Margins 17,607,849 14,964,246 32,572,095

Receivables 1,591,003 - 1,591,003

Other provisions - 3,786,312 3,786,312

Income Tax Provision 13,115,985 - 13,115,985

Deferred tax liabilities - 753,825 753,825

Other liabilities 12,235,799 - 12,235,799

Unrestricted investment accounts 579,869,650 715,814,807 1,295,684,457

Fair Value Reserve - 16,477,605 16,477,605

Investment Accounts Holders – Subsidiaries - 3,666,356 3,666,356

Non-controlling Equity - 599,661 599,661

Investment Risks Fund - 20,733,334 20,733,334

Deferred tax liabilities - 2,481,983 2,481,983

Income tax provision- Investment risks fund 2,165,825 - 2,165,825Total unrestricted investment accounts holders’ equities and Assets

1,054,001,670 952,230,673 2,006,232,343

Net 331,073,554 (154,242,957) 176,830,597

131

Assets

2008

Till One Year More Than One Year Total

JD JD JD

Cash and account balances at central banks 577,031,989 - 577,031,989

Account balances at banks and banking institution 103,138,295 - 103,138,295Unrestricted investment accounts at banks and

banking institutions9,320,403 - 9,320,403

Deferred Sales and other receivables –net 273,324,187 532,898,285 806,222,472

Finances –Net 2,200,946 12,139,369 14,340,315

Financial Assets Available for Sale 93,079,158 - 93,079,158

Assets held to maturity - Net - 12,092,195 12,092,195

Investments in affiliate and subsidiary companies - 21,324,686 21,324,686

Ijara Muntahia Bittamleek Assets –Net 19,855,472 90,452,707 110,308,179

Real Estate Investments - 57,311,157 57,311,157

Good Loans-Net 9,627,646 1,567,291 11,194,937

Property and Equipment –Net - 27,462,585 27,462,585

Intangible Assets - 416,286 416,286

Other Assets 3,481,920 1,648,501 5,130,421

Total Assets 1,091,060,016 757,313,062 1,848,373,078

Liabilities and Unrestricted Investment Accounts Holders’ Equities

Liabilities 593,755,432 4,361,074 598,116,506

Banks and Banking Institutions Accounts 8,525,718 - 8,525,718

Clients’ current and Call accounts - Trust 522,192,026 - 522,192,026

Cash Margins 32,730,860 - 32,730,860

Receivables 2,137,162 - 2,137,162

Other provisions - 3,659,312 3,659,312

Income Tax Provision 16,125,462 - 16,125,462

Deferred tax liabilities - 701,762 701,762

Other liabilities 12,044,204 - 12,044,204

Unrestricted investment accounts 1,026,548,510 - 1,026,548,510

Fair Value Reserve - 27,426,015 27,426,015

Investment Accounts Holders – Subsidiaries - 1,815,396 1,815,396

Non-controlling Equity - 573,896 573,896

Investment Risks Fund - 22,877,371 22,877,371

Deferred tax liabilities - 7,295,686 7,295,686

Income tax provision- Investment risks fund 2,730,314 - 2,730,314

Total unrestricted investment accounts holders’ equities and Assets

1,623,034,256 64,349,438 1,687,383,694

Net (531,974,240) 692,963,624 160,989,384

132

64. Potential Obligations (Beyond the Financial Position Statement)

a. Credit Obligations

2009 2008

JD JD

L/Cs 37,367,029 29,369,419

Acceptances 5,652,313 5,601,493

Guarantees 76,855,724 76,691,824

-Paying 21,870,190 21,888,364

-Well Performance 31,964,216 32,282,996

-others 23,021,318 22,520,464

-Unutilized Limits 67,512,627 67,504,918

Total 187,387,693 179,167,654

b. Contractual Obligations

2009 2008

JD JD

Contracts of Purchasing properties and equipment( systems) - 1,500,000

Construction projects contracts 2,391,947 1,023,462

Total 2,391,947 2,523,462

The above contractual obligations are matured during one year since effective date.

65. Lawsuits Lodged against the BankThe value of the lawsuits against the bank amounted to JD( 711,467 ) as of December 31,2009 compared to JD (641,380) as of December 31, 2008 within the normal activity of the bank. In the opinion of the bank`s senior management and lawyers, the consequences incurred by the cases of joint investment accounts are booked on the Investment Risks Fund and that incurred on the bank is covered by the general provision.

66.Comparative FiguresSome of 2008 figures were reclassified to correspond to 2009 presentation

133

Head Office and Branches

Head Office, Branches and Offices

Address Telephone Fax P.O. BoxPostal Code

Number of Employees

Head Office Shmeisani/ Amman567737756663255623801

56663265684755

926225 11190 328

Shmeisani Branch Shmeisani/ Amman567710756236135650436

56236125691700

925997 11190 75

Amman Branch King Faisal St./ Amman463830646533064627315

46524004614299

7987 11118 40

Jabal AlHussein BranchKhaled Bin AlWalid St./

Amman

569440356734085686977

56241845693866

921047 11110 43

Zarqaa Branch King Hussein St./ Amman398140139846673961886

39846463930911

1973 13110 45

Wehdat Branch Prince Hassan St./ Amman477810147443614744362

47891444751645

16165 11152 32

Irbid Branch/ Baghdad St. Baghdad St./ Irbid724515172407287247655

72470517240730

1950 21110 55

Wadi AlSeer Branch Main Street/ AlBayader581615258596625824161

5824162 140223 11814 34

Aqaba Branch AlHammamat St./ Aqaba201431520143172014961

2014313 1048 77110 24

Madaba Branch Petra St./ Madaba324280232488983248896

3244702 695 17110 26

Sweileh Branch King Hussein St./ Sweileh534156353598795346104

5349461 717 11910 25

Maan Branch King Hussein St./ Maan213223521317992133048

2131733 204 71111 19

Karak Branch Itali Street/ Karak235351323526362352638

23535082353484

220 61110 40

Jarash branch King Abdallah St./ Jarash635265263526536352268

63526546352264

32 26110 29

134

Mafraq Branch Ali Abdin St./ AlMafraq623197462303816236367

6232212 68 25110 23

Salt Branch AlBayadah St./ Saltt355379035579853556795

3553792 1035 19110 20

Tafilah Branch AlBaladiah St./Tafilah224264722426482242649

2242650 42 66110 24

Dahiat AlRawdah Branch * AlRawdah St./ Amman515972151527745161628

5151773 961155 11196 29*

Ruseifah Branch King Hussein St./ Ruseifah374475637436983743692

3744758 1138 13710 22

Saqf Alseil Branch Saqf Alseil/ Amman461480146159744616257

46148054616256

182059 11118 34

Irbid Branch/ Hashmi St. Hashmi St./ Irbid727940172768217279404

72794057276437

501 21101 53

Ajloun Branch Opp. Consumer Est./ Ajloun642077764210046420787

6420700 167 26810 23

El-Weibdeh Branch Abdali/ Opp. Garages461642046163404616470

4616450 927988 11190 17

Deer Abi Said BranchKing Hussein St./ Deer Abi

Said

652155165216546521653

6521553 45 21710 20

Yarmouk Branch Yarmouk St./ Amman475716047571614757167

4757169 620823 11162 25

Abu Alanda Branch AlHizam AlDaeri/ Amman416200141629734163900

4162971 742 11592 18

Sahab BranchBehind the Grocery Market/

Sahab

402380140238044029111

4023803 647 11511 23

Marka Branch King Abdallah St./ Amman488931148943994872413

4886633 340965 11134 25

Mutah Branch University St./ Mutah237000123702852370345

2371804 50 61621 23

135

Ghweirieh Branch King Ghazi St./ Zarqa393090139309023984658

3930903 150266 13115 19

Ramtha Branch Bunuk St./ Ramtha738049073804937380497

7380489 546 21410 18

Hashmi AlShemali BranchJabal AlHashmi Alshemali/

Amman

505211150511175051119

5055114 230693 11123 16

Hashmieh Branch Hashmieh/ Zarqa381170138117053811708

3811709 185 13125 18

Irbid Branch/ Hakma St. Hakma St./ Irbid740135274013577401360

7401361 230101 21110 26

Buqaa Branch Mukhayam AlBuqaa/ Buqaa472633347263354726915

4726334 825 19381 21

Jabal AlTaj Branch Hawooz St./ Amman475230047556444789981

4752302 410676 11141 18

Kufranja Branch Main Street/ Kufaranjah645450164546096454610

6454510 61 26873 14

Jabal AlNasr BranchSabra and Shatelah St./

Amman

492140049214064921407

4921409 425838 11140 18

Yajouz Branch Yajouz main St./ Yajouz374515037451523745154

3745153 120032 13712 17

Nazal Branch Dustour St./ Amman439793043979314397936

4397937 710999 11171 21

Telaa AlAli Branch Telaa AlAli/ Amman533318453402555333618

5342744 1582 11953 17

Hai Maasoum Branch AlFarouq St./ Zarqa393540139354183935422

3935427 11897 13118 16

Abdallah Ghousha St. Branch

Um AlSumaq/ Amman585752058575215857527

5857529 709 11821 14

Irbid Branch/ Idoun St. Idoun/ Irbid725475672547607254764

7254763 620595 21162 19

136

Wasfi AlTal St. Branch Wasfi AlTal St./ Amman552810255280955528073

5528075 961021 11196 22

Jabal AlNuzha Branch Jabal AlNuzha/ Amman567332556733975633522

5673635 240448 11124 16

Marj AlHamam Branch Marj AlHamam St./ Amman571407757145565749987

5715538 1093 11732 17

Wadi Mousa Branch Main Street/ Wadi Mousa 215791921579202157921

2157922 53 71810 13

Jubeiha Branch Jubeiha Main Street/ Amman 534426153442375344228

5344239 874 11941 17

Tareq Branch/ TabarbourShehab AlHubari St./

Amman

506043650605415060547

5060548 295 11947 18

Irbid Branch/ Palestine St. Palestine St./ Irbid726210172621057262108

7262109 3922 21110 17

New Zarqaa BranchMecca AlMukarama St./

Zarqa

385240238524053852409

3852410 150472 13115 16

Deer Ala Branch Main Street/ Deer Ala357352035735213573524

3573525 44 18210 15

Sweifieh Branch Sweifieh/ Amman581222658122275812072

5812029 142643 11844 16

Abu Nussair Abu Nussair/ Amman523632552363265236327

5236329 541405 11937 14

Thanieh Branch AlThanieh/ Karak238662623866272386671

2386632 15 61151 15

Khraibat AlSouq Branch Khraibat AlSouq/ Amman412084641209284120932

4120894 987 11621 18

Khalda BranchAmer Bin Malek Street/

Amman55459485546296

5542813 4428 11953 14

AlShounah AlShamalia Branch**

Main street/AlShounah AlShamalia

658030165802756580282

6580298 15 28110 15

137

Industrial City office/ Sahab Sahab402972040297224029724

4029725 259 11512 2

C Town Office Amman Mall/ Amman552839455283955528396

5528397 1582 11953 3

Mukhayam Hiteen Office Mukhayam Hiteen 361125336112543611327

3611328 2720 13713 4

Al Qasr Office*** Al Qasr/ Karak231505023155902315591

2315524 32 61210 4

Islamic Hospital Office Islamic Hospital/ Amman565726156572625657263

5657264 928430 11190 5

Jabal Amman Office Jabal Amman/ Amman463301646330174633019

4633048 840610 11180 4

Awjan Office Main Street/ Awjan365666336566643656665

3655029 8545 13162 4

AlDhalil Office Tareq Complex/ AlDhalil382517938251803825182

3825181 190 13136 4

AlHisn Office AlHisn/ Irbid701240170124027012403

7012404 357 21510 4

Al-Istiklal Mall OfficeAl-Nuzha – Istiklal

Street

568393656839375683938

5683897 922503 11192 3

Dahiyat Al Yasmin Office Dahiyat Alyasmin

420541342053474205439

4205386 710068 11117 5

AlHuriyah Street Office *

Al-Muqablain-AlHuriyah Street

420561742056824205645

-- 606 11623 4

AlBonded Office/ Sahab Sahab Industrial city40297274029728

4029729 259 11512 13

Sama AlRousan Office**Sama AlRousan triangle/

Irbid

758545075851527585153

7585124 25 21129 5

* Comprehensive of the Dahiat AlRawdah Branch employees ** Inaugurated on 11/1/2010*** It was decided to be changed into a branch on 1/2/2010

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